Resilient forest-based value chains? Econometric analysis of roundwood prices in five European countries in the era of natural disturbances

Raphael Asada, Elias Hurmekoski, Annechien Dirkje Hoeben, Marco Patacca, Tobias Stern and Anne Toppinen

Forest Policy and Economics, 2023, vol. 153, issue C

Abstract: Climate change poses a growing threat to European forests due to the increasing frequency and severity of storms, insect outbreaks, and other natural disturbances. Natural disturbances affect both the volume and the quality of harvested wood and increase the tendency of increased salvage loggings, reducing roundwood prices over the short-term. The increase of unexpected inflow of wood resources prompted by disturbance-induced salvage logging can undermine the stability of forest-based value chains. In addition to supply shocks, rebuilding can increase the demand for wood products in regions affected by storms. This study assesses the impact of supply and demand shocks on roundwood prices. An econometric analysis was performed focusing on five forest-rich European countries (Austria, Czechia, Germany, Finland, and Sweden), applying the theory of price transmission and using a set of candidate resilience predictors that were expected to moderate shock impacts. We used annual time series data in differenced form on salvage logging, forest products production and trade, and roundwood prices. We found that disturbances tend to increase the domestic prices of sawlogs, suggesting a shortage effect on high-quality wood. The effect is less pronounced when country-level sawlog exports are high, implying that mainly high-quality sawlogs are exported in the cases in question. For pulpwood, supply shocks tend to decrease pulpwood prices. Strategic logging management and international trade are possible resilience predictors, but their potential is limited and should not be overestimated. Since it is difficult to assess the magnitude by which the changing climate will affect the already increasing disturbance regimes, the results only allow indirect projections to be made about future and larger magnitude events.

Keywords: Socio-ecological resilience; Roundwood price; Forest disturbance; Salvage logging; Forest politics (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:forpol:v:153:y:2023:i:c:s1389934123000709

DOI: 10.1016/j.forpol.2023.102975

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