Leakage of forest harvest changes in a small open economy: case Norway. Issue 5 (4th July 2018) - I. Kallio, A. Maarit
ABSTRACT: The effect of changes in roundwood harvests in Norway on the harvests in rest of the world is examined using a global forest sector model. About 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. Asymmetries between the effects of increasing and decreasing the harvests also exist. Hence, the magnitude of leakage rate is case specific, though considerable. Under tightening wood supply there is less need/room to respond to harvest increase/decrease in Norway with incremental/reduced harvests elsewhere. When the use of global forest resources intensifies with increasing wood demand in the future, leakage rates can be smaller than today. It is important to account for harvest leakage in order to avoid overestimating the climate benefits of policies that decrease or increase roundwood harvests. For instance, for full carbon sequestration benefits of increasing harvests for harvested wood products, creating fresh additional demand for these products should be prioritized. Else the origin of raw material and the place of production for these products may change instead of their stock.