A. Maarit I. Kallio

• D.Sc. (Econ.)
• Professor (Full) at Norwegian University of Life Sciences

Safeguarding biodiversity has been one of the most important issues in environmental and forest policies since the 1990s. In Southern Finland, decisions concerning further actions for the preservation of forest biodiversity will be made in the coming years. To support policy making, we present a multi-regional model that is applicable in determinin...

Forests play an important role in mitigating climate change. Forests can sequester carbon from the atmosphere and provide biomass, which can be used to substitute for fossil fuels or energy-intensive materials. International climate policies favor the use of wood to substitute for fossil fuels rather than using forests as carbon sink. We examine th...

Wood-based cellulose fibres for textiles, hygiene and health products have been in the market for long time, but competition with other materials has kept their market share modest. The shortage of land for the expansion of cotton production, environmental concerns related to cotton and the oil-based textile materials, changes in fashion, and new t...

Note: this article is open access. https://authors.elsevier.com/sd/article/S1389-9341(22)00060-0 This study assesses harvest levels compatible with the reference levels for forest management sinks (FRLs) within the EU, the UK, and Norway (EU + UK + N). A detailed examination of the harvest data and the National Forest Accounting Plans of the cou...

The carbon substitution and storage effects related to Norwegian forests and the forest sector were compared under three potential roundwood harvest scenarios: maintaining harvests at 2021 levels, increasing harvests by 20% due to policies aimed at maximizing economic benefits from the forest sector, and reducing harvests by 20% due to biodiversity...

Since 2020, the outlook for the European forest sector has been unusually uncertain. After the recovery from the COVID-19 pandemic seemed to take off, Russia invaded Ukraine. In addition to human suffering, the war has economic consequences. Comparing scenarios quantified by global forest sector model projections, this study examines the impacts of...

Harvested wood products (HWP) can play an important role in climate-smart bioeconomic transformation. They contribute to climate change mitigation through two main mechanisms: carbon storage and substitution. Norway has ambitions to strengthen the contribution of its forest sector in climate change mitigation. Ideally, the future production and use...

Harvested wood products (HWP) contribute to climate change mitigation via two main mechanisms: carbon storage and substitution. The authors examined the data on carbon storage and substitution factors of HWPs that are relevant in evaluating the climate change mitigation potential in the context of the Norwegian forest sector. While there seem to be...

Because the two common tree species in Norway, Picea abies L. Karst (Norway spruce) and Pinus sylvestris L. (Scots pine), differ in their susceptibility to the fungus Heterobasidion spp., converting at least parts of the rot-infested spruce stands to pine pays-off economically in some cases. Pixel-level information on rot levels and site indexes (S...

Norway’s most common tree species, Picea abies (L.) Karst. (Norway spruce), is often infected with Heterobasidion parviporum Niemelä & Korhonen and Heterobasidion annosum (Fr.) Bref.. Because Pinus sylvestris L. (Scots pine) is less susceptible to rot, it is worth considering if converting rot-infested spruce stands to pine improves economic perfor...

• Key message Root and rot (RBR) caused by Heterobasidion parviporum Niemelä & Korhonen and Heterobasidion annosum (Fr.) Bref. damages Fennoscandian spruce stands. In case the rot infection and its severity are unknown, the mere risk of infection should seldom affect the harvest timing. When it does, the gains by harvesting earlier are minimal. •...

Free access up to february 2022 at: https://www.sciencedirect.com/science/article/pii/S1389934121001799 The forest-based sector is expected to play an important role in the economic transformation to a sustainable circular bioeconomy. Several countries have formulated policies and strategies with an aim to speed up this process. A range of possibi...

Coniferous sawnwood is the most important solid wood product in terms of its production volume and economic significance. It also plays a vital role in the forestry-forest industry value chain. We estimated price- and income elasticities for per capita softwood sawnwood consumption based on FAO data. Varying demand patterns are found across the reg...

The European Union and China are two of the three biggest economies and trading blocs in the world, and their economic and trade relations are increasingly interlinked. China’s role as an export destination for forest products made in the EU, as a potential source or destination of capital for developing the forest-based sector, and as Europe’s key...

Before 25.6.2019 loadable from: https://authors.elsevier.com/a/1Y--w4y2D1SJ6g --------- In Grassi et al. (2018) it is argued that wrong premises result in misleading conclusions in Kallio et al. (2018) about the Forest Reference Level (FRL) approach included in the EU LULUCF Regulations. Discussing the arguments presented by Grassi et al., we find...

Statistics on production and trade of forest products form a basis for the analyses of the economic and environmental performance of the forest sector and for projecting future developments in the sector and related markets. The forest product statistics FAOSTAT by Food and Agriculture Organization of the United Nations (FAO) are perhaps the most w...

In order to meet the requirements of the Paris climate agreement, the EU plans to set new goals for forest carbon sinks. This may affect the future development potential in the wood using sectors in Europe and their contribution in the new circular bio-economy. We explore the potential consequences mainly on the forest sector in the region consisti...

The effect of changes in round wood harvests in Norway on the harvests in rest of the world is examined using a global forest sector model. 60–100% of the harvest change in Norway is offset by an opposite change in the rest of the world. Such leakage rates vary over time, wood category, background scenario, and the size of the harvest change. Asymm...

Note: Full text can be loaded up to 10 February 2018 from the link: https://authors.elsevier.com/a/1WGLn3QkGxkfV2 Abstract: Rapid decarbonisation of the transport sector calls for increased use of biofuels. Part of the increase may be covered by fuels produced from logging residues, wood chips and round wood. This article addresses the economic po...

There is dispute over the climate change mitigating effect of boreal forest management due to the contrasting influence it has on different vectors influencing radiative forcing (RF). For the first time, this study has combined the estimated effects of carbon sequestration in forests and wood products, the surface albedo of forests, the direct and...

Agrobiomass and biowaste are important sources of biomass for energy, and they are indeed the mainstream bioenergy sources in Central and Southern Europe (Kallio et al. 2015). In the Nordic countries, bioenergy from forests gains more importance. In this Woodbio study, we considered economic potential of increased use of bioenergy made of logging r...

The diverse uses of forests for mitigation climate change and for production of energy biomass, andtheir potentially conflicting impacts, have been investigated by the forest sector modeling communi-ties for some years (e.g., Delacote and Lecocq, 2011; Delacote et al., 2013). This special issue presentssome new results provided by forest sector mod...

Finland is committed to the EU goal of reducing greenhouse gas emissions by 80% from the 1990 levels by 2050. We examine the potential role of the forests in fulfilling this goal in Finland. We base our analysis on the six scenarios that supported the parliamentary process of preparing Energy and Climate Roadmap 2050 for Finland to which we contrib...

Euroopan Unioni tavoittelee siirtymistä kilpailukykyiseen vähähiiliseen yhteiskuntaan, jossa vuosittaiset kasvihuonekaasupäästöt on onnistuttu supistamaan 10–20 prosenttiin vuoden 1990 tasosta vuoteen 2050 mennessä. Taustalla on globaali tavoite hillitä ilmaston lämpenemistä. VTT:n, VATT:in, Metlan ja GTK:n yhteishankkessa Low Carbon Finland 2050 –...

This study examines how subsidies for wood-fired heat and power plants and wood with coal co-fired power plants influence the use of wood biomass for energy in the short (2020) to medium (2030) term in the EU (European Union). Analysis shows that without subsidies wood-fired electricity will take only a marginal market share due to limited availabi...

The main political objectives of EU's renewable strategy are decreased use of fossil energy sources, reduced CO2 emissions and increased energy self sufficiency. Wood based bioenergy plays an important role in this strategy. The potential increase in wood demand for bioenergy production is of high interest for the EU forestry and forest industries...

This study examines the effects of different coal, natural gas and carbon emission prices and market situations on the use of wood for electricity and heat production in the European Union. The analysis is carried out using the global forest sector model EFI-GTM expanded to cover electricity and heat production from wood, coal, natural gas, wind an...

Overall, this special issue aims to show how forest sector models may help decision making and provide useful insights, when it comes to climate change mitigation policies and their impact on forest sector.

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 fo...

In this study, we examine the effects of the price for fossil fuel CO2 emissions on the use of wood in Europe. In particular, we assess the economic potential to substitute wood for coal in large scale heat and power production. We also review the impacts of increased energy wood usage on the forest industry and roundwood prices. The analysis is co...

We develop a spatially elaborate partial equilibrium model for the forest chips market in Finland and demonstrate its use by examining the targets outlined by the government for the increase in the use of forest chips for energy. Because the supply of stumps and logging residues is tied to roundwood harvests, reaching the target seems unrealistic w...

This study addresses the effects of increasing energy wood prices on the EU forest sector and on the use of wood biomass for energy. We examine different energy wood price levels under two contrasting scenarios of future global development, defined by the A1 and B2 storylines of IPCC. A1 depicts increased globalization and rapid economic growth. In...

Efficient functioning of the wood market is crucial in a country where the forest sector is of strong macroeconomic importance. We investigate the possibility of noncompetitive behavior of the buyers in the Finnish pulpwood market. We simulate the buyers' behavior under alternative competition structures (perfect competition, Cournot oligopsony, an...

Using wood as a building material affects the carbon balance through several mechanisms. This paper describes a modelling approach that integrates a wood product substitution model, a global partial equilibrium model, a regional forest model and a stand-level model. Three different scenarios were compared with a business-as-usual scenario over a 23...

The Russian Federation is the world's largest net exporter of roundwood. To encourage shift in exports from roundwood to value-added industrial products, Russia has set large tariffs on its roundwood exports, and announced that even higher ones would be introduced in the future. Using a global forest sector model, the EFI-GTM, we analyse how the Ru...

The impact of using alternative measures to curb EU imports of illegally harvested wood are compared based on the simulation runs of the EFI-GTM global forest sector model. Four policy options are considered: 1) Baseline Scenario - Voluntary Partnership Agreements (VPA) between the EU and six countries, 2) Option 1 - expanded VPAs increased to incl...

Large scale forest sector models tend to have thousands of parameters, of which many have values that are unknown or not known exactly. Despite the wide use of such models in the policy analyses, the impact of the overall uncertainty on the results and the distribution of the resulting variable values have not been considered. It would be important...

Maa- ja metsätalousministeriö (MMM) tilasi keväällä 2007 Metsäntutkimuslaitokselta (Metla) vaihtoehtolaskelmia taloudellisten ja politiikkaan liittyvien olosuhteiden vaikutuksista metsäalalla. Vaihtoehtolaskelmia käytetään taustatukena metsäneuvoston vuonna 2006 esittämien metsäsektorin painopiste- ja tavoitelinjausten uudelleen arvioimisessa. Lask...

When the automobile was developed near the beginning of the last century, it was the relatively new fuel gasoline, not the familiar ethanol that became the fuel of choice. We examine the intersections of the early development of the automobile and the petroleum industry and consider the state of the agriculture sector during the same period. Throug...

Land use is a key factor to social wellbeing and has become a major component in political negotiations. This paper describes the mathematical structure of the European Forest and Agricultural Sector Optimization Model. The model represents simultaneously observed resource and technological heterogeneity, global commodity markets, and multiple envi...

Venäjä on ilmoittanut nostavansa raakapuun vientitulleja asteittain 50 euroon kuutiometriltä, mikä johtaisi toteutuessaan puun tuonnin loppumiseen Venäjältä. Tutkimuksessa pyritään arvioimaan, miten suuria vaikutuksia Venäjän noin 15 miljoonan kuutiometrin suuruisen raakapuun tuonnin loppumisella olisi Suomen metsäsektoriin ja kansantalouteen pitkä...

This article contributes to methodology of real options analysis of investments in capital intensive process industries, where relatively homogenous outputs are produced using commonly known production technologies. In addition to capacity expansion, the method can be used for analysis of mergers and acquisitions. Valuation of the real option is ba...

In the next coming years, political decisions will be made upon future actions to safeguard forest biodiversity in Southern Finland. We address the economic consequences on the Finnish forest sector of conserving additional 0.5% to 5% of the old growth forest land in Southern Finland. The impacts on supply, demand and prices of wood and forest indu...

Scenarios with either 3% or 5% of the productive forest stock in Western Europe set-aside for conservation are compared to a baseline case. The latter case is further compared to cases where the whole of Europe and North America join the 5% conservation program. The scenarios are created by employing a global forest sector model, EFI-GTM.The aggreg...

Forest sector models give relevant information to decision makers only if they are based on correct economic hypotheses. This requires that the data from which the model parameters are estimated are consistent with the a priori assumptions made on market agents' behavior and competition patterns. For static models, rather simple nonparametric tests...

Expanded domestic wood product consumption: The recent increases in apparent consumption of wood products in Finland have occurred in plywood and sawn wood, where the domestic consumption has doubled over the last decade. This is partly due to macroeconomic recovery but the parallel promotion programs on wood use in house construction and repair ha...

The Global Forest Sector Model EFI-GTM was introduced in the year 2003 to study the impacts in various regions on prices, production, consumption, surpluses, investments, trade of roundwood and forest industry products. The model includes 60 regions worldwide with six wood categories, seven sawnwood and wood based panel products, six pulp grades, f...

The global forest sector model EFI-GTM was applied to assess regional impacts in Europe of increased timber supply caused by potential acceleration of forest growth in Europe. The EFI-GTM is a multi-periodic partial equilibrium model, which contains 31 European regions and 30 regions for the rest of the world, and trade between the regions. The end...

This article unifies and extends ideas from nonparametric production analysis and DEA for testing organizational efficiency. We show how the admissible price set can be restricted to account for prior information on prices. These restrictions may relate prices to input and output quantities in order to test noncompetitive behavior of the evaluated...

Efficient functioning of the wood market is crucial in a country where the forest sector is of strong macroeconomic importance. We investigate the possibility of noncompetitive behavior of the buyers in the Finnish pulpwood market. We simulate the buyers' behavior under alternative competition structures (perfect competition, Cournot oligopsony, an...

The interdependence of the markets for pulpwood, sawlogs and sawmill chips is analysed using a short-run model, which accommodates the alternative competition structures of wood buyers. We propose that imperfect competition in the pulpwood market tends to make the sawmills owned by the pulp and paper companies larger than the independent ones, even...

In this study we test for oligopsony power of the pulp industry over the Finnish pulpwood and wood chip markets. Following Bergman and Brannlund, we apply duality to derive a factor demand system from which the markdown of the pulpwood market price from the value of its marginal product is statistically estimated. Our empirical estimates assuming c...

This report analyzes the competitiveness of the pulp and paper industry in Finland as well as potential future changes in its structure in response to changes in factors affecting the business environment. Examples of such factors include development of market demand, availability of raw materials, and production capacity growth in competing countr...

There is a growing interest in efficient ways to use biomass for the substitution of fossil fuels and non-biomass materials. Wood-based building material can affect the energy and carbon balances through at least four mechanisms: the relatively low fossil energy needed to manufacture wood products compared with alternative materials; the avoidance...

Tiivistelmä ja 4 erip.. Diss. -- Helsingin kauppakorkeakoulu.