Since the early 1950s, the United Nations Economic Commission for Europe (UNECE) and Food and Agriculture Organization of the United Nations (FAO) have been working with countries to produce outlook studies for the European forest sector. The objective of these studies has been to provide decision makers in the forest sector with information and analysis about long-term trends in the sector and projections of future developments. This is the sixth major study in the European outlook study series.
The earlier outlook studies were called “European Timber Trends Studies” (ETTS) and focused very much on the supply and demand of wood products and the implications of market developments for roundwood supply. However, since the 1980s, the scope of these studies has been enlarged to cover all of the main products and services supplied by forests. Although the analysis of non-wood forest products and services has never been of the same depth and focus as that for wood (due to the limited availability of data and methodologies), the more recent outlook studies have attempted to provide a more holistic outlook for the sector and the current study continues in this direction. In addition, the study has been re-named the “European Forest Sector Outlook Study” (EFSOS) to reflect this change.
The previous European outlook study (ETTS V) was published in 1996 and work started on the current study in 2000. The study follows most of the main lines of investigation pursued in previous outlook studies, but with an additional effort to improve the analysis in the following three areas:
• a more detailed analysis of the outlook for the former centrally planned countries in Eastern Europe and the former-USSR (countries in transition), where the transition towards market economies has progressed significantly since the preparation of ETTS V;
• an expansion in the scope of the analysis to cover other aspects of sustainable forest management, including non-wood forest products and services and developments in forest resources, forest management and policy; and
• an examination of cross-sectoral policy linkages, to demonstrate how the sector is affected by policies in other sectors and how the sector can contribute to the broader objectives of sustainable development.
In addition to the main objective of analysing long-term trends and preparing the outlook for the sector, two other objectives of the outlook study are:
• to identify long term structural trends in the past; and
• to provide a comprehensive data set of historical trends and outlook scenarios for decision makers to use in their own analyses.
The time horizon for the analysis of past trends is based on the availability of data. In most cases, historical statistics were available back to the year 1961 (e.g. forest products statistics), so the results are presented for the period from 1961 to 2000. Where longer time-series were available, some parts of the analysis have looked back as far as 1950 (e.g. the development of forest resources). In other cases, the analysis of historical trends has only looked at the last 20 to 30 years.
The year 2000 was used as the base-year for the outlook study projections and the projections cover the period 2000 to 2020. A 20-year time horizon was used because of the uncertainty of making projections for a longer time period. For example, projections of some of the underlying variables used in the outlook (e.g. Gross Domestic Product or GDP) become increasingly unreliable over longer time periods. Furthermore, policies, technology and socio-economic variables can change very rapidly and in ways that are difficult to foresee and this reduces the reliability of projections over a longer time period. Given these challenges, the analysis also describes some of the main factors that could affect the reliability of the outlook study projections.
As in previous studies, the forest sector has been defined to cover both forest resources and the production trade and consumption of forest products and services. The analysis of forest resources includes an analysis of biological variables (e.g. forest area, growing stock, increment, fellings and removals) as well as an analysis of forest management and policy related variables. The analysis of forest products and services focuses mostly on market trends, although changes in technology and some policy related variables have also been examined.
Forest products include all of the primary wood products manufactured in the forest processing sector (sawnwood, wood-based panels, paper and paperboard) and the main inputs or partly processed products used in the sector (roundwood, wood pulp, wood residues and recovered paper). Secondary or value-added forest products (such as wooden doors, widow frames and furniture) are not covered, although trends in these markets have been taken into consideration. In addition, the use of wood for energy has been partly covered in the analysis, but the analysis has been limited due to the poor quality of existing data.
Non-wood forest products (NWFPs) and forest services are also included in the study, but the analysis is limited by the lack of quantitative statistics about the production and consumption of these outputs over a long period.
The UNECE region comprises 55 member countries from Europe (including Turkey and Israel), North America (United States of America and Canada) and the former-USSR. This study covers 38 of these countries (see Figure 1), including all of the major European countries (including Turkey, but excluding Israel) and seven of the countries from the former-USSR (the three Baltic States - Estonia, Latvia and Lithuania - plus Belarus, Republic of Moldova, Russian Federation and Ukraine).
The other countries from the former-USSR were excluded from the study, due to a lack of data and because these countries are geographically closer to Asia than they are to Europe. In addition, they will be covered in a separate outlook study for West and Central Asia, which FAO has just started to prepare.
Some of the very small countries in Europe1 are excluded from the study because they have very few forest resources and small markets and the UNECE and FAO have few statistics for these countries. Their exclusion is unlikely to detract from the analysis for the region as a whole.
For the purpose of the sub-regional analysis, countries were grouped as follows:2
• Western Europe: Austria; Belgium; Denmark; Finland; France; Germany; Greece; Iceland; Ireland; Italy; Luxembourg; Netherlands; Norway; Portugal; Spain ; Sweden; Switzerland; and United Kingdom (18 countries);
• Eastern Europe: Albania; Bosnia and Herzegovina; Bulgaria; Croatia; Czech Republic; Estonia; Hungary; Latvia; Lithuania; Poland; Romania; Serbia and Montenegro; Slovakia; Slovenia; The former Yugoslav Republic of Macedonia (TFYR Macedonia); and Turkey (16 countries); and
• CIS sub-region: Belarus; Republic of Moldova; Russian Federation; and Ukraine (4 countries).
Figure 1 Geographical scope and sub-regions used in the outlook study
Any grouping of countries is likely to be unsatisfactory in some respects, but it was felt that these three sub-regions would reflect the similarities between countries in each sub-region and many of the main differences between each of the sub-regions in terms of their forest resources, markets and levels of economic development. One disadvantage of the above groupings is that it is not possible to identify the EU as a single unit, either before or after the expansion in 2004. However the EU has now become so large, that variations within the EU are now at least as large, in some respects, as between EU and some non-EU countries. Another disadvantage is the loss of a specific perspective for southern Europe, the Nordic countries, or the Balkans. The secretariat is happy to supply the country level data to any analyst wishing to reconstruct the trends for different country groups than those presented here.
Although the objective of EFSOS is to provide policymakers with information and analysis about long-term trends and projections for the forest sector, a broader aim of this work is to help all stakeholders to enhance the contribution of the forest sector to society. For the private-sector, this means helping to improve investment, planning and marketing decisions, to increase profitability and wealth creation. For the public-sector this means helping governments to translate non-market demands and other considerations into well designed and efficiently implemented policies. In order to do this, it is necessary to understand the complex linkages between activities in the sector and the demands of society.
Figure 2 The relationships between the forest sector and society
Source: based on Thoroe et al (2004).
Figure 2 presents a simplified picture of some of the main interactions between the forest sector and society. The shaded boxes represent areas that are largely under the control of individuals working in the forest sector, while the unshaded boxes represent areas that are outside the control of the sector. Similarly, black lines represent relationships and interactions that can be controlled by the sector, while grey lines represent external forces (dashed lines indicate a weak relationship).
The underlying forces that drive developments in the forest sector are the exogenous factors shown in the bottom right-hand corner of the figure. These include socio-economic trends (e.g. changes in income, technology, population and human preferences), which mostly influence the demands placed on the sector. Environmental factors (e.g. rates of tree growth, climate change and natural disasters) tend to have more of an influence on forest resources and the supply of products and services. Although the forest sector can do little to influence these exogenous factors, there are some actions that may have an impact. For example, improved information about the sector can influence society’s perception of the sector and forest research can improve technology or alter some of the environmental factors that affect the sector.
The main way in which these exogenous factors affect the sector is by changing the demands that society places on the sector (shown in the box at the top of the figure). These include demands for marketed products and services from the sector as well as demands for non-marketed products and services. In addition to these demands, society also raises other considerations that are becoming increasingly important in the sector. For example, in recent years, people have become more interested in how forest products and services are produced as well as how much is produced.
Most of the interactions between society and individuals working in the forest sector take place within two different frameworks. Demands for marketed products are largely expressed within a market framework, whereas most of the other demands placed on the sector are translated into government policies and regulations (the policy framework) (Schmithüsen, 2004). In addition to this, there are some direct linkages between society and the forest sector (e.g. as expressed in corporate social responsibility statements), but these linkages are currently quite weak.
The policy framework includes the set of policies, laws and regulations that are implemented by forestry administrations (internal policies), plus other government policies that have an impact on the sector (external policies). All of these policies can have a direct effect on the sector or an indirect effect through their effects on the markets for forest products and services.
Internal (forestry) policies are under the control of forestry administrations and are largely established through a dialogue between society and individuals working in the sector. The linkages between the forest sector and forestry policies are generally strong and operate in both directions (i.e. forestry policies have a major impact on the sector and individuals in the sector can usually influence these policies). The majority of forestry policies are directed at forest resources and, in particular, at the way that forests are managed.
External policies (e.g. in sectors such as the environment, agriculture, energy, industry and trade) also have an impact on the forest sector. Environmental policies affect both forest resources and the markets for forest products and services. Agricultural policies affect the demand for land and the profitability of alternative land uses. Energy policies affect the demand for wood energy, while policies in trade and industry affect the forest products industry in many ways. Although these policies can have a major impact on the forest sector, individuals working in the forest sector currently tend to have less of an influence on these policies.
Most of the demands for marketed forest products and services fall within the market framework. This is where demands are translated into market transactions and commercial relationships are established between customers and suppliers of outputs from the sector and inputs to the sector. These relationships may be self-regulated, but are often governed by rules and regulations established by law (e.g. contract law).
Markets are not under the control of any institution or group of individuals, but individuals working in the forest sector can have an influence on markets through their marketing activities. Governments also have a significant impact on markets through their economic policies (e.g. fiscal and monetary policies, trade regulations and exchange rate policies) and policies such as building codes and safety regulations. In contrast, forestry policies generally have less of an impact on the market framework and are mostly concerned with technical issues such as phytosanitary regulations.
The text above has briefly described the main interactions between society and the forest sector and described where individuals working in the sector can have an influence. Some of the forces affecting the sector can not be easily influenced. In these cases, the outlook study provides information about the historical and future directions of these forces, so that the sector can adapt to these changes. In areas where the sector does have an influence (e.g. forestry policies), the outlook study can be used as an analytical tool to assess alternative courses of action. In this way, the outlook study can be used to assist with the preparation of policies, plans and programmes that will enhance the future contribution of the forest sector to society. It may also serve as a means of communication to the “non-forest” sectors, helping them to appreciate the consequences of their policies on the forest sector.
The outlook study comprises four main components, covering: exogenous factors; forest resources; markets; and policies. The analytical work implemented in each of these four areas has attempted to examine the main trends and relationships within the sector (as portrayed in Figure 2) and, where possible, make projections of future developments. This work included a mixture of quantitative analysis (e.g. statistical analysis of past trends, development of models and projections for the future) and qualitative analysis. Details of the methodologies used in each component can be found in the Discussion Papers produced in support of this study.
Exogenous factors. The major piece of analytical work on exogenous factors was carried out by the Independent Centre for Economic Studies (NOBE) in Poland (NOBE, 2002). The NOBE study analysed trends in GDP in all European countries and produced projections of GDP growth that were used in the outlook. The NOBE study focused in particular on economic growth in the countries in transition and presented three alternative future scenarios of economic growth for all countries in the region.
In addition to the NOBE study, trends in some of the other main exogenous factors were also analysed as part of the preparation of this report. The results of this analysis are presented in various part of the report, particularly in Section 1.
Forest resources. An historical analysis of forest resources was produced by Gold (2003). The main objective of this study was to describe how market forces and policy decisions have affected the development of forest resources in the past. An additional aim was to describe some of the main driving forces that will affect forest resources in the future.
The study was implemented by collecting historical statistics on forest resources from national correspondents, harmonising the statistics to comparable measurement units (where possible) and producing simple trends showing the changes in the most important variables (i.e. area, growing stock and increment). Historical statistics were collected for 18 out of the 42 countries in the region and the results were validated by national correspondents, who also provided interpretations of the historical trends in their countries
The outlook for forest resources was produced by researchers from Alterra in the Netherlands and the European Forestry Institute (Schelhaas et al, in prep). The objective of this study was to describe the future development of forest resources in Europe (in terms of forest area, growing stock and increment) under each of the three future scenarios produced in the outlook study.
The analysis used forest inventory statistics and information about forest management regimes (e.g. rotation periods, intensity of thinning, etc.) provided by national correspondents. This information was received from nearly all countries in the region. The information was input into the European Forest Information Scenario (EFISCEN) Model, which is an age-class simulation model. The EFISCEN Model was then used to show how different projections of future roundwood production would affect the future growth and development of European forest resources.
Markets. An historical analysis of the markets for wood products was produced by Solberg (in prep). The objectives of this analysis were to gather and analyse information about historical trends in forest products markets in Europe, to identify the major structural changes that have taken place and to describe some of the main reasons behind these changes. Some of the trends in markets were also analysed in greater depth during the preparation of this report. All of this analysis was based on the UNECE and FAO forest products statistics (e.g. FAOSTAT) as well as a number of macroeconomic statistics from various sources.
The outlook for wood products markets was produced by Kangas and Baudin (2003). The objective of their study was to quantify the relationships between changes in exogenous factors (e.g. GDP and product prices) and the production, consumption and trade of processed wood products. Statistical (econometric) techniques were used to estimate these relationships. Following this, these relationships were then used to make projections of future production and consumption under each of the scenarios used in the study.
Following the work of Kangas and Baudin (2003), the raw material balance was analysed to show how different sources of wood and fibre supply have been used in the past (and will be used in the future) to satisfy the raw material needs of the forest processing sector. The approach used in ETTS V was repeated in the EFSOS. Projections of the production of processed forest products were converted to the amounts of wood required to manufacture those product (wood raw material equivalent or WRME) using technical conversion factors. These results were then compared with trends in the production of different types of wood and fibre used in the sector and it was assumed that international trade would bring supply and demand into equilibrium.
In addition, to the analysis of markets for wood products, some information was collected about the production, consumption and trade of non-wood products and forest services. This analysis was limited by the lack of statistics and information available about these outputs from forests. However, despite the lack of information, it is possible to make some tentative suggestions about the trends and outlook for these outputs and these are presented in the report.
Policies. Historical changes in policies within and outside the forest sector were described as part of the studies already mentioned above. In addition to this, information was also collected about some of the other major policy changes that have affected the sector in the recent past and this information is presented in various parts of the report.
For the outlook, a survey and analysis of likely future policy developments was undertaken by a group of forestry policy experts (Thoroe et al, 2004). The main objective of this study was to identify specific internal and external policy changes that might have a significant impact on the forest sector in the future. The work started with research and analysis of all available publications and policy documents, from which possible future policy developments were organised into 19 different policy areas. After consultation with a wider group of policy experts, the number of areas was reduced to 13 and a “Delphi inquiry” was used to solicit expert opinions about the likely future changes in each of these areas and the possible impact of these changes. One important part of this analysis was an examination of cross-sectoral policy issues (in areas such as: energy; environment; trade; and agriculture), which were shown to be significant.
Many of the results of the policy analysis could not be integrated into the quantitative statistical modelling of the outlook for the sector, but the results of this analysis provide important additional qualitative information about likely future developments in the sector.
In addition to the main components described above, a number of other studies were either commissioned as part of the EFSOS or were used in the preparation of this report.
Russian outlook study. The Russian Federation has one of the largest forest sectors in Europe and, as a country in transition, has seen tremendous changes in the forest sector over the last decade. In order to obtain detailed and up-to-date information about the current status and outlook for the forest sector in this country, an outlook study for the Russian forest sector was produced by Russian experts as part of the EFSOS. The information from this study was incorporated into the results presented here and further information can be found in OAO NIPIEIlesprom (2003).
Employment outlook study. An analysis of the trends and outlook for employment in the forest sector was produced by the International Labour Office (ILO). Employment is one of the important social dimensions of sustainable forest management and the results of this study have been included here in the sections on the contribution of the forest sector to national economies. Further details of the study can be found in Blombäck et al (2003).
FAO global trends and outlook studies. In order to place the European outlook in a global context, a number of FAO’s global trends and outlook studies were used during the preparation of this report. Specifically, the global outlook for forest plantations (Brown, 2003) was used to assess the future production of roundwood, the global outlook for woodfuel was used for wood energy projections (Broadhead et al, in prep) and information is presented here from FAO’s recent study of the contribution of the forest sector to national economies (Lebedys, in prep). More generally, many of the developments discussed here are also occurring at the global level and a number of the trends identified in FAO’s global outlook studies have been incorporated into this report.
As noted above, the future is determined by a mixture of variables. Some of these can be easily influenced, while others can not. Trends in the variables that can not be easily influenced present a number of constraints on future courses of action. Given these, the purpose of scenario analysis is identify where society might want the forest sector to go in the future and the actions (i.e. policy measures) that are feasible and would lead the sector in this direction.
The EFSOS policy analysis identified five main scenario “packages” that could each be considered as a group of policy measures that would lead the forest sector towards one overall aim or objective.
The five packages included policy measures that would influence the development of the forest sector in the following areas:
• biodiversity, including nature conservation;
• globalisation, innovation and market structures;
• countries with economies in transition;
• regional development; and
• energy and environment.
These alternative scenarios should not be considered as mutually exclusive, as some of the measures included in one package would also contribute to the aims of some of the other packages. Furthermore, it is possible that a country or group of countries might try to move the sector towards more than one of these objectives at the same time. However, for the purpose of this analysis, a more limited set of scenarios was used to see what might happen if the sector was steered in very different directions in the future. One scenario (a baseline or “change nothing” scenario) assumed a continuation of past trends, with no attempt to shift the sector in one way or another. In addition to this, three of the scenarios listed above (the first, second and fifth) were considered as alternatives for further investigation. A lack of information about wood energy prevented an in-depth analysis of the fifth scenario (energy and environment), so, in addition to the baseline scenario, the two alternative scenarios that were finally used in the outlook study were the “conservation” and “integration” scenarios.
The translation of alternative scenarios into quantitative projections of the future is difficult, because of the limitations of the available analytical models. For example, in most previous outlook studies, alternative scenarios have been simply defined in terms of different assumptions about future rates of growth in population and GDP and changes in forest products prices. The scenarios developed for EFSOS contain a richer description of the differences between the alternatives and some of the more subtle impacts of different courses of action. Unfortunately, however, the models developed for EFSOS are still largely driven by changes in GDP growth, prices of forest products and forest resource variables (e.g. forest area). The information about these variables contained in the alternative scenarios was used to produce the results presented later on, but it should be noted that these projections present only some of the differences that may occur under each of the different scenarios.
Unless otherwise specified, the statistics used in the EFSOS come from the statistical databases of the UNECE and FAO (e.g. FAOSTAT). These databases contain statistics that are supplied by national correspondents or estimates produced by UNECE and FAO (where national statistics are not available). The terms, definitions and measurement units used in these statistics have been developed over many years in collaboration with national experts and they are standardised across all countries. Further technical information about the statistics can be found in other UNECE and FAO publications, such as the Timber Bulletin (UN, 2003) and the Forest Resource Assessment (FRA) (UN, 2000).
The UNECE and FAO statistical databases are regularly updated, as part of a continuous dialogue with countries about how to improve the quality of these statistics. The statistics used in the analyses presented here are those that were available and the time each study was implemented. Therefore, some of the statistics may not correspond exactly with those quoted in other UNECE and FAO publications.
Most of the basic data on forest resources was taken from the current FRA (UN, 2000) and earlier versions of the FRA. Forest fire statistics were taken from the UNECE on-line database on forest fires and earlier published versions of these statistics. Other information about forest resources was obtained from a variety of sources noted in the text.
For the analysis of historical trends in forest resources in Europe, statistics were collected for the following three variables: forest area; growing stock volume; and annual volume increment. These statistics were collected from national correspondents, supplemented by information from existing databases and literature such as the FRA (UN, 2000).
The statistics provided by national correspondents were mostly taken from the results of national forest inventories as far back as the mid-1940s. The majority of countries supplied three or four historical estimates of each of the three variables listed above and trends in these statistics were derived by interpolating between the different estimates. From this, a consolidated data set was produced, covering the period 1950 to 2000.
For each of the three variables, countries were asked to supply statistics related to the area of forest available for wood supply (FAWS). In most cases this was possible, although a few countries supplied statistics using a different definition of forest area. In particular, the statistics for the Russian Federation relate to the area of forest and other wooded land (FOWL). In addition, for the increment statistics, countries were asked to provide net annual increment (NAI), but a few countries supplied statistics using a different definition of annual increment.
The statistics collected for this analysis covered all of the countries in Western Europe. In Eastern Europe, statistics were obtained for all countries except the Baltic States (Estonia, Latvia and Lithuania) and four of the five countries of the former Yugoslavia (Bosnia and Herzegovina, Croatia, Slovenia and TFYR Macedonia). For the CIS countries, historical statistics about the forest resource could only be obtained for the Russian Federation. For the comparison between fellings and increment (see Section 2.1.5), production in the Russian Federation until 1992 was estimated as a proportion of production from the former-USSR, based on production statistics from all of the former-USSR countries since 1992. The conversion from production (or removals) to fellings was based on statistics from the FRA.
A detailed analysis of these trends is published in Gold (2003), where further explanations of the data collection process and definitions of the different statistics supplied by countries can also be found.
Forest products statistics only record the amounts of production and trade in forest products. In many places, the historical analysis refers to the amount of forest products consumed. It should be noted that this is “apparent consumption”, which is calculated as the sum of production plus imports minus exports.
It should also be noted that the sub-regions include countries that did not exist before the early-1990s. For the historical analysis of trends in forest products markets, historical statistics for these new countries were estimated as a proportion of the recorded amounts for the previous geographical units. Thus, for example, the historical statistics for Yugoslavia were used to produce historical statistics for the five new countries that have replaced Yugoslavia. The proportions that were used were based on the relative shares of each new country in the old geographical unit, using the more recent statistics produced by each of the new countries. This is a simplistic assumption that is of little importance at the sub-regional level except in the case of the three Baltic States (formerly in the USSR, but now included in Eastern Europe) and the CIS sub-region (which includes only four countries of the former USSR).
The remainder of this report is in four main sections. Section 1 presents the analysis of historical trends in the forest sector in Europe. This section presents an extensive and comprehensive analysis of many different aspects of the sector, starting with forest resources and management, followed by market trends for forest products and finishing with a brief analysis of the trends in some of the linkages between the forest sector and society.
Sections 1, 4 and 5 can all be considered as the “outlook” part of the study. Section 1 examines the “driving forces” or exogenous factors affecting the sector and presents qualitative and quantitative statements about likely future changes in many of these variables. It also includes further details of the EFSOS policy analysis.
Section 4 presents the projections for the future production, consumption and trade of forest products and services. Due to the lack of data and difficulty in modelling the supply and demand of some forest outputs, the majority of this section focuses on the markets for wood products.
Section 5 presents a summary of the major results and conclusions of the study and the main implications for all stakeholders in the forest sector in Europe. This is based on the discussion contained in the EFSOS policy analysis, after modification to take into account the outlook study projections (presented earlier) and consultation with national correspondents.
The production of EFSOS was a collaborative effort between UNECE, FAO and numerous individuals in countries. Official national correspondents were nominated by UNECE member states and, in addition, a number of other experts and representatives of different stakeholder groups were involved in the production of this study. A list of all of the participants known to UNECE and FAO is given in Box 1 and their participation in this exercise is gratefully acknowledged.
Box 1 National correspondents and outlook study experts involved in the production of the European Forest Sector Outlook Study
The UNECE and FAO will continue to work with countries on improving the statistical databases and analysis presented in this study as well as with identifying follow-up activities to enhance the performance of the European forest sector in the light of these results. In this respect, comments on any aspect of the EFSOS would be most welcome and can be directed to Kit Prins ([email protected]), Volker Sasse ([email protected]) or Adrian Whiteman ([email protected]).
1 Note: wherever “Europe” is mentioned in this report, it refers to the countries listed below, unless otherwise specified.
2 Note: some of the UNECE-FAO Discussion Papers related to the outlook study refer to the first two of these sub-regions as EU/EFTA and Central and Eastern European Countries (CEEC). This report refers to them simply as Western Europe and Eastern Europe.
