The future development of the use of wood in Russia and its potential impacts on the EU forest sector

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Abstract:

Several uncertainties are associated with the future development in Russia. The aim of this study is to analyse the effects of some of them on the forest sectors in Russia and the European Union. In particular, we examine the impacts of increasing prices set on atmospheric CO2 emissions and the changing investment climate in Russia on the use of forests in the EU and Russia as well as on the export of forest products from Russia to the EU. In the analysis, we use a numerical forest sector model, EUFASOM. The results suggest that a more intensive utilisation of the vast forest resources in Russia call for rapid improvements in the investment climate. Otherwise, the growth of pulp and paper production in Russia would mainly be directed at satisfying the domestic demand. It is hard to penetrate the EU markets which are suffering from excess capacity and a slow demand growth. Russia's importance as a supplier of energy wood to the EU is likely to increase, unless for instance export tariffs or tighter climate policies in Russia hinder such a development. The results demonstrate large differences in the harvesting and use of wood in the EU and Russia across the alternative future scenarios.

Keywords: Bioenergy; Russia; carbon price; forest sector; risk premium

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/02827581.2012.735695

Affiliations: 1: Finnish Forest Research Institute, Vantaa, Finland 2: Research Unit Sustainability and Global Change,University of Hamburg, Hamburg, Germany

Publication date: April 1, 2013

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