Forest Products Sector Research Articles

An Agenda for Studying Human and Ecosystem Health in the Boreal Forest

ABSTRACTThe Network of Centres of Excellence (NCE) in Sustainable Forestry Management is a new research initiative in Canada that examines management practices that protect boreal forest resources while permitting controlled economic development. A critical factor in the viability of such practices is socioeconomic and cultural acceptability in the communities of the region. Health is an essential factor in this dimension of sustainability. The NCE includes a health component that examines issues of human and ecosystem health related to boreal forest communities in western and northern Canada. These may be direct, involving direct health effects on the human body, or indirect, mediated by social mechanisms. Communities in the region are generally small, remote, limited in economic resources, and support a mixed economic development of forest products, oil and gas, and traditional aboriginal activities. The small and dispersed population and the time frame for the study do not permit application of the usual methods of broad‐based community health research. Instead, emphasis is placed on four main elements with a variety of robust and sometimes qualitative methods to suit the problems. The four elements are: (1) ”Population health,“ a conceptual model of determinants of health, as interpreted for boreal forest communities; (2) application of the population health model to anticipate and prevent human health problems associated with various scenarios of sustainable forestry management; (3) occupational health and safety issues associated with increased activity in the forest products sector; and (4) large‐scale ecosystem change and human health. The NCE presents an unusual opportunity to study both the ecosystem and human health implications of an ecological intervention. Its activities may provide insight into the complex relationship between human and ecosystem health.

TRADE BARRIERS IN THE PACIFIC FOREST SECTOR: WHO WINS AND WHO LOSES

This study uses a global model of the forest sector to examine changes in log production, consumption, prices, and trade and discusses the impacts of changes on economic wealth transfers for log export ban and log export tax scenarios. The results indicate that trade barriers are inefficient in allocating logs to domestic processors when a supply shortage exists. The trade barrier produces economic losses that exceed the benefits to the processors. A log export ban reduces log prices in the Pacc North‐west by 8.5% and reduces timber harvests by 6.7%. The logs diverted to domestic mills save 1,208 more jobs than log export job losses but at an average annual cost of £230,463 per job saved. Economic transfers benefit lumber producers in the region under the ban. However, the benefits amount to 61% of regional timber producer losses including losses in the log export price premium, 39% of the loss to Asian processors, and 55% of the global consumer losses. Globally, lumber consumers lose £733 million. A log export tax scenario produces smaller impacts on prices and harvests since it does not eliminate total log exports. The tax scenario saves no jobs, and the average economic gain per job lost is £24,251 or about two‐thirds of the current average salary in the forest products sector in the region. A log tax has the ability to retain £78 million in tax revenues.

In from the cold: perspectives on Finnish entry to the European Union

Analyses the context of the recent changes in Finland’s economic performance and its trading relationship with the former USSR. Examines the Finnish business system, with its distinctive characteristics established by the dominant forest products sector, in relation to the development of the country’s newer electronics sector. Uses four Finnish company case examples to illustrate managerial opinion, company strategy and development in light of the country’s application to join the European Union (EU). Draws implications for Finnish companies of EU membership and considers its impact on the country’s business system.

The Canadian forest product sector: a sectoral econometric model

A sectoral model of the forest product sector (FPS) comprising the wood, furniture, and pulp and paper industries has been developed and estimated from 31 (1961–1991) years of data. The model consists of seven behavioral equations ((i) total output, (ii) domestic consumption, (iii) exports, (iv) imports, and prices of (v) consumption, (vi) exports, and (vii) imports) and one identity for each industry. Four additional identities complete the structure of the entire FPS model. The performance of this model is evaluated by sample period simulation. A forecast has been made for the next 5 years, and impact analysis has been done for changes in housing activity. The forecast indicates a slower annual growth in the FPS than in the total economy.

The Carbon Budget of the Canadian Forest Sector: Phase I

An assessment of the contribution of Canadian forest ecosystems and forestry activities to the global carbon budget has been undertaken. The first phase of this study consisted of the development of a computer modeling framework and the use of pub lished information to establish the sector's current role as a net source or a net sink of atmospheric carbon. The framework includes age-dependent carbon sequestration by living forest biomass, net detrital litter fall of carbon to the forest floor, subsequent accumulation and decomposition release in three soil compartments, retention of carbon in manufactured products derived from harvested forest biomass, and burning of forest biomass for energy. There is explicit representation of the role of ecosystem disturbances, such as fire, insect-induced stand mortality, and harvesting (clear-cutting, clear- cutting and slash burning, and partial cutting), as they affect carbon releases and transfers to the forest floor and to the forest product sector. Regrowth of biomass and changes in soil decomposition processes following disturbance are also simulated within the model. In the first phase of the work, national and provin cial data bases were used to provide the first compre hensive estimates of the net carbon exchange between Canadian forest ecosystems and the atmosphere for the reference year 1986.

Paper 3. impacts and responses to climate change in forests of the mink region

The adaptability of forests in the U.S. midwest to a changing climate is assessed. The forests of Missouri are simulated with a ‘forest-gap’ model, a stochastic model of the annual growth and mortality of trees within mixed-species forest plots. The development of representative forest plots under an analog climate like that of the 1930s is compared to development under baseline climate conditions. With no management response, average forest biomass in the region declines by 11% within ten years, primarily due to moisture-stress induced mortality. Longer term declines in forest productivity on the order of 30% are simulated. A variety of possible management responses through planting or harvesting practices were evaluated. None of these adaptations appear to be practical, although the salvage harvest of stressed trees would offset the economifc losses associated with the early mortality. An investigation of anticipated trends in the broader forest products sector suggests that opportunities for further adaptation to offset the decline in primary productivity of this region's forest are quite limited. However, a shift to wood powered electrical generation in the region might justify a level of management that would allow some adaptation to the analog climate change.

Regional forest migrations and potential economic effects

Increasing mean global temperatures due to rising levels of carbon dioxide and other “greenhouse” gases in the atmosphere could significantly affect the distribution of commercially important forests in North America. Warmer mean annual temperatures and changing precipitation patterns could cause the range of most temperate forests to shift northward. The temperature increases could outpace the ability of forests to adapt, causing considerable stress and mortality to trees in the southern part of their range without a commensurate increase in growth across the expanding range. If realized, these potential biological impacts on forest distribution and health would affect forest management decisions substantially and could adversely impact forest-based economies in the United States. Specific effects on forest management include changes in the methods and costs of fire, insect, and disease protection; greater demands on forest lands for conversion to food production; and uncertain changes in site quality. Such impacts could affect the economic feasibility of forest management substantially. Subsequent impacts of climate change on the forest products sector in the southern United States alone could total $300 million for declining timber volume and resulting pulp and paper yields, and more than $100 million for increased management costs.

Technical Change in the North American Forestry Sector: A Review

Abstract Economists have examined the impact of technical change on the forest products sector using the historical, index number, and econometric approaches. This paper reviews econometric analyses of the rate and bias of technical change, examining functional form, factors included, and empirical results. Studies are classified as first- second-, or third-generation approaches. First-generation studies are based on simple value-added measures of output, usually employ simple functional forms to represent the production technology, and incorporate only capital and labor inputs. Second-generation studies are characterized by estimation of more complex, flexible dual cost or profit functions and typically include resource and often energy inputs. Third-generation studies also rely upon dual formulations of the production structure and include multiple factors; however, in addition they specify the dynamics of adjustment of quasi-fixed factors over time. The studies reveal a tradeoff between the richness of the theoretical structure of the production technology and the consistency of the empirical results. Most studies have reported a labor-saving and energy-using bias to technical change, but little or no wood-saving bias, and many report a wood-using bias. Since technical advances occur in spurts, the use of a simple linear time trend to represent the state of technology is a major limitation of virtually all models. Alternative measures, such as the power ratings or throughput measures, might better capture the characteristics of a technology. Use of such measures might also be combined with a cross-sectional approach in an attempt to avoid some of the statistical problems, such as serial correlation, that characterize time series data. Finally, if the goal of the analysis is to forecast factor demand and cost implications of technical change, simulation models may offer a more promising alternative. For. Sci. 38(1):134-159.

Optimal Tariffs on Intermediate and Final Goods: The Case of Tropical Forest Products

Abstract Products made from tropical timber are subject to a variety of tariff and nontariff barriers. This paper considers the potential welfare gains from the imposition of optimal (welfare-maximizing) tariffs on these products. Optimal tariffs and associated welfare gains are determined by applying nonlinear programming to a static (single-period), three-region, three-product, partial equilibrium simulation model of the tropical forest products sector. Optimal tariffs are determined for each region both with and without retaliation by other regions. In the case of retaliation, two- and three-region Cournot-Nash equilibria are described. Principal findings are that modest welfare gains are possible in the absence of retaliation, but large losses may result if other regions retaliate. Since tariff revenue is the critical component of the welfare increase, the redistribution of this revenue has important equity implications. For. Sci. 35(3):720-731.

Technical Change and Industrial Policy

Preface List of Figures List of Tables 1. Introduction: G Humphrys, (University College, Swansea) and K Chapman, (University of Aberdeen) (I) Nature and Spatial Dimensions of Technical Change 2. Technical innovation, long cycles and regional policy: C Freeman (Science Policy Research Unit, University of Sussex) 3. Some aspects of technical innovation, diffusion and technical change: the diffusion of the colour scanner in the United Kingdom: R McArthur (Cheltenham College of St. Paul and St. Mary) 4. Producer Services and Economic Change: some Canadian evidence: P A Wood (University College, London) 5. Technology and occupational change in the United Kingdom shipbuilding industry: R T Harrison, (The Queen's University of Belfast) (II) Technical Change and Industrial Restructuring 6. Technical change as a response to economic crisis: the case of oil refining in Western Europe: D A Pinder and M S Husain (University of Southampton) 7. The impact of technical change on the organization and locational structure of automobile production in Canada: J Holmes (Queen's University, Ontario) 8. Restructuring in the steel industry: the link between new technology and change in a 'mature' industrial system: J H Bradbury (McGill University) (III) Technical Change and Spatial Policy 9. Organizational adaptation and the technological autonomy of branch plants in the United Kingdom electronics industry: D R Charles (University of Newcastle-upon-Tyne) 10. Technology, dependence and regional development: the case of the aerospace industry: D Todd and J Simpson (University of Manitoba) 11. Innovation policy and mature industries: the forest products sector in British Columbia. R Hayter (Simon Fraser University) 12. Promoting 'high technology' industry: location factors and public policy: C V Christy and R G Ironside (University of Alberta, Edmonton) 13. Conclusions: G. Humphrys, (University College, Swansea) and K Chapman (University of Aberdeen)

Lake States Wood Product Production and Consumption: Trends and Perspectives

Abstract Estimates of primary and secondary wood product production and consumption are presented for the Lake States (Michigan, Wisconsin and Minnesota). The region's major wood product sector, the paper and board industry, is focusing increasingly on the production of high-quality papers. Current exports to other regions total 1.5 to 2 million tons and are expected to rise, but the region has a considerable dependence on imports of woodpulp and softwood residue. Hard-wood lumber production and consumption in the region are nearly balanced, but between 1 and 1.5 bbf of softwood lumber are imported each year. More than 500 million ft³ of softwood plywood are also shipped unto the region each year from outside producers. Largely due to the dramatic increase in structural particleboard (i.e., primarily waferboard and oriented strand board) in the early 1980s, the region exports more than 1.3 billion ft² of particleboard annually. Greater cooperation between the states holds significant opportunity for increasing investment in the region's forest products sector and better utilizing its forest resources. North. J. Appl. For. 4:193-197, December 1987.

Hewers of Wood: The Forest Products Sector

Forest products is a natural resource sector in which there has been intense strain between Canada and the United States, but in which the industries in both countries have been beset by a number of common difficulties originating in the global environment. Canadian and United States forest products firms are vulnerable to external influences, such as changing world prices, shifting exchange rates, and the emergence of new competitors, and to domestic difficulties as well as to developments in the bilateral trading relationship. Within this context the responses of the two governments to changing competitive circumstances have differed, and bilateral disputes have emerged.

The organization of vertically related transactions in the Canadian forest products industries

The objective of this study is to evaluate the significance of transactional determinants in explaining observed patterns of vertical integration in the Canadian forest products sector. The integration patterns of the 30 largest forest-based enterprises are documented and explained in terms of the transactions cost approach. The study concludes that transactional considerations, particularly asset specificity, are robust empirical determinants of governance structures.

Hewers of Wood: The Forest Products Sector

Hewers of Wood: The Forest Products Sector

Protection of the Forest: A Social and Economic Imperative

The forest products sector is a vital segment of Quebec's economy. Until recently this sector was supported by abundant resources Today, the situation has changed. Resource shortages could soon develop in certain regions. Even if forest management is increased to moderate these shortages, the necessity to protect the forest will not diminish. On the contrary, investments cannot be made without adequate protection programs.Protection programs are not new. Fire protection was initiated in the early 1950s and has since made considerable progress.Losses from the current spruce budworm epidemic support the necessity to protect forests from insects. Insect control strategies and techniques have improved and will continue to improve in response to public pressure concerning the use of chemicals in the forest. As foresters, our challenge is not only to protect the forest but to inform the public of the necessity of protection to maintain our economic and social well being.

Changing Perceptions of the U.S. Forest Sector: Implications for the RPA Timber Assessment

Over the past seventy-five years, the U.S. Department of Agriculture Forest Service has conducted more than fifteen major assessments of the long-term supply, demand, and price outlook for forest products in the United States. These assessments and associated long-term projections have played a significant role in shaping people's perceptions of the future. They have served as means for identifying emerging problems in the forest sector and as a vehicle for evaluating the potential effectiveness of various policies on these problems. The Forest and Rangeland Renewable Resources Planning Act (RPA) enacted in 1974 formalized the issue identification function of the assessment process and established a direct link between long-range timber assessment projections and the development of specific Forest Service programs, plans, and budget requests. The RPA, among other things, has fostered the development of a long-term analytical planning system within the Forest Service and a greater willingness on the part of policy makers, both within the agency and in the Congress, to consider alternative policies and scenarios for the future. It has also generated a concern about what forces or developments act to change the outlook and prospects for the forest sector. The 1980 timber assessment required by the RPA (USDA Forest Service 1982), as those made during the last three decades, forecast strong growth in consumption of both solid wood and fiber products, limited growth in the domestic forest inventory, and continued real growth in forest products prices through the year 2000 and beyond. Within the past five years, however, traditional views of the longrange prospects of the industry have been increasingly challenged. Quite apart from concerns about the extent and timing of recovery from the current recession, the outlook for the forest products sector seems beset with a growing number of uncertainties. The changes that have come to light in recent years suggest the need for several important modifications in the Forest Service assessment process. We examine the apparent sources of growing uncertainty in the future of the U.S. forest sector and provide examples of the effects of these uncertainties on the long-term outlook. In the concluding section, we propose changes in the Forest Service assessment process to accommodate these new developments.

Research and Development in the Canadian Forest Product Sector ‐ Another Weak Link?

For over a decade the Science Council of Canada has argued with increasing conviction that Canada's industrial dilemmas stem from technological weaknesses that result primarily from high levels of foreign ownership (e.g. Cordell, 1971; Bourgault, 1972; Britton and Gilmour, 1978; Shepherd, 1980). Indeed, the council urges that only by adopting an industrial strategy explicitly based on the concept of technological sovereignty can Canada hope to ensure the international competitiveness of its economy and offer the employment opportunities appropriate to its stage of development. If such pleas are to be translated into comprehensive and coherent action, however, there is an admitted need for more sectoral studies to detail the effects of foreign ownership and provide an evaluation of existing capacilities necessary to the formulation of effective policies. In this paper, therefore, I will briefly compare research and development (r & d) in the forest product sectors of Canada and the United States. Since Canada's forest industries have long attracted foreign, and especially American, direct investments, such a comparison is considered to be particularly appropriate (Marshall et al., 1936: 35–55; Hayter, 1981a).