You are here: ILREconomic and Agricultural PolicyResearch Forest model

The BW-GLOBAL-FOR model - A global recursive-dynamic model for forest management and wood based products with a focus on Baden-Wuerttemberg

projekt in the Context of "Cluster Forst und Holz Baden-Wuerttemberg supported by:
(network) (network) (network)

Overview:

BW-GLOBAL-FOR is a research activity to analyze impacts of market and policy changes with regard to forest management and wood based products on the forest and related industries in the German state of Baden-Wuerttemberg, based on an economic simulation model. The project is a joined initiative of the Chair of Remote Sensing and Landscape Information Systems FeLis, Uni Freiburg, Matthias Dees and Juliana Walkiewicz, and our group.

Summary

Companies and institutions related to the forest and wood sector in Baden-Wurttemberg are subject to continuous structural change due to at the one hand increasing integration in national and international markets and at the other hand due to growing up- and downstream linkages with other sectors both in and outside of Baden-Wurttemberg (e.g. energy, agriculture, chemical industry, transport). That leads to increasing information needs for companies and the public sector with regard to the future development of the forest industry as well as of impacts of changes in markets, e.g. with regard to supply of forestry products, its prices and production costs, marketing opportunities or national and international competition.

Economic simulation models can contribute here by providing scenario-based, forward looking results. Given the specifics of the forest sector, dynamics need to be properly integrated in the model structure. In order to allow for sufficiently detailed analysis while reflecting the fact that the forestry and wood sector is predominantly situated in more rural areas, an appropriately regionalized model is asked for. Given data availability, a NUTS2 regional resolution is envisaged for Baden-Wurttemberg, while Germany is depicted at the level of federal states. The envisaged design of the economic model with regard to space and time shall ensure that it can properly inform and support decision taking in the private and public sector.

Aims

The research project aims at the application of state-of-art approaches in multi-commodity modeling to the the wood and forestry sector with a focus on Baden-Wurttemberg, depicting markets of forest and wood products and their interdependencies in space, time and between products, including innovative wood-based materials. That will allow to simulate impacts of changes in policies and markets on the forest and wood sector, from global to regional scale. In order to cover important intra-regional spatial relations related to raw wood supply and marketing, Geographical Information System based analysis of the model's results will depict intra-regional transport flows in the forest and wood supply chain and their changes.

Research steps:

  1. Literature research and analysis of data availability
  2. Conceptual and methodological design of a regionalized economic simulation model, including prototyping, e.g. with regard to equation structure, functional forms
  3. Appropriate parameterization of the model and development of an ex-ante reference run, plausibility check of model responsiveness to market and policy shocks based on sensitivity analysis
  4. Development of counterfactual scenario writing in cooperation with private and public stakeholders, counterfactual runs
  5. Final reporting including summary presentation of simulation results
  6. Publication of results, discussion with stakeholders on simulated results and model applicability

Current status

So far, a first operational prototype version of a Multi-Commodity Model based on the Spatial Equilibrium approach has been developed since begin of 2014 which integrates German, European and global data (steps 1. and 2.)

Core model characteristics:

  • Recursive-dynamic with a yearly resolution
  • Distinction between coniferous and broadleaved forests, and four wood products (sawlogs from coniferous and broadleaved forest, pulp wood, other)
  • Demand dis-aggregated by saw mills, paper mills, chipper and other users of forest products
  • Supply differentiated by small private owners, other private owners and public owned
  • Regionalized at federal state level for Germany and national level for neighbouring countries, plus a Rest of Europe and a Rest of the World aggregate, the final version shall regionalize Baden-Wuerttemberg to NUTS II regions (Regierungsbezirke)
  • Bi-lateral trade flows either based on spatial arbitrage condition or alternatively based on an Armington approach using data from the the FAO forest trade matrix
  • Sigmoid function driven by the relation between current year and long-term expected prices drives relation between current year removals and net increment, taking into account past changes in standing forest volume
  • Constant-elasticity of transformation function with low transformation elasticities drives shares of harvested products from removals
  • Price dependent net growth rate of standing forest
  • Constant-elasticity of substation function with low transformation elasticities determines shares of products used by the different users
  • Based on data of the ECE FAO Foerst and Timber statistics for Europe and global FAO Forest statistics, and data for Germany's federal states from the so-called "Bundeswaldinventur" (Federal Forest Inventory)

Technical realization:

Documents:

Staff working at ILR on the project



Last updated: Friday, January 06, 2017