Browsing by discipline "Metsäekonomia (liiketaloudellinen metsäekonomia)"
Now showing items 1-20 of 20
-
(2007)The United States is the world s single biggest market area, where the demand for graphic papers has increased by 80 % during the last three decades. However, during the last two decades there have been very big unpredictable changes in the graphic paper markets. For example, the consumption of newsprint started to decline from the late 1980 s, which was surprising compared to the historical consumption and projections. The consumption has declined since. The aim of this study was to see how magazine paper consumption will develop in the United States until 2030. The long-term consumption projection was made using mainly two methods. The first method was to use trend analysis to see how and if the consumption has changed since 1980. The second method was to use qualitative estimate. These estimates are then compared to the so-called classical model projections, which are usually mentioned and used in forestry literature. The purpose of the qualitative analysis is to study magazine paper end-use purposes and to analyze how and with what intensity the changes in society will effect to magazine paper consumption in the long-term. The framework of this study covers theories such as technology adaptation, electronic substitution, electronic publishing and Porter s threat of substitution. Because this study deals with markets, which have showed signs of structural change, a very substantial part of this study covers recent development and newest possible studies and statistics. The following were among the key findings of this study. Different end-uses have very different kinds of future. Electronic substitution is very likely in some end-use purposes, but not in all. Young people i.e. future consumers have very different manners, habits and technological opportunities than our parents did. These will have substantial effects in magazine paper consumption in the long-term. This study concludes to the fact that the change in magazine paper consumption is more likely to be gradual (evolutionary) than sudden collapse (revolutionary). It is also probable that the years of fast growing consumption of magazine papers are behind. Besides the decelerated growth, the consumption of magazine papers will decline slowly in the long-term. The decline will be faster depending on how far in the future we ll extend the study to.
-
(2013)This thesis investigates the methods and principles used to calculate timberland return indices. By studying these existing indices and new possible methods, the study contributes to the accuracy and methodology of timberland return measurement. Attention towards timberland investing has been increasing among institutional investors, while at the same time timberland return indices are also being utilized by policy makers as supporting indicators for policy decisions. The possibility to measure timberlands returns exactly is understandably of great interest and a desirable goal. Previous literature does discuss the general aspects of timberland return measurement and index calculation, but very little about the actual index number theory and its implications to the timberland return measurement. For this reason, there exist some issues regarding the currently available indices that make them prone to bias and otherwise unfavorable and inappropriate in the context of index number theory. The four existing indices considered in this thesis are the NCREIF Timberland Index, John Hancock Timber Index, Timberland Performance Index and the index formula utilized by the Finnish Forest Research Institute. The results of the examination confirm the benefits of fully-regulated forest in index construction, as it offers a stable and comparable base for an index. Also the effects and trade-offs of price selection, interest rate and index frequency are presented and discussed in detail. The utilization of net present value in index construction, instead of the liquidation value, is a new approach utilized in this thesis and the issues regarding its use in index calculation are considered and assessed. The key finding of this thesis is that the index formula used by the Finnish Forest Research Institute suffers from a weighting problem and it is not consistent in aggregation. To overcome the index number problems present in the existing indices, the pseudo-superlative Montgomery-Vartia index formula is applied into timberland returns. It is shown that the index is consistent in aggregation and that it approximates closely the desirable superlative indices. As a result, this thesis advocates the use of Montgomery-Vartia index. It is more appropriate formula for timberland return measurement than the currently used or the other available index formulas are, and its implementation should therefore be considered.
-
(2006)The aim of this study was to compare the differences between forest management incorporating energy wood thinning and forest management based on silvicultural recommendations (baseline). Energy wood thinning was substituted for young stand thinning and the first commercial thinning of industrial wood. The study was based on the forest stand data from Southern Finland, which were simulated by the MOTTI-simulator. The main interest was to find out the climatic benefits resulting from carbon sequestration and energy substitution. The value of energy wood was set to substitute it for coal as an alternative energy fuel (emission trade). Other political instruments (Kemera subsidies) were also analysed. The largest carbon dioxide emission reductions were achieved as a combination of carbon sequestration and energy substitution (on average, a 26-90 % increase in discounted present value in the beginning of rotation) compared to the baseline. Energy substitution increased emission reductions more effectively than carbon sequestration, when maintaining dense young stands. According to the study, energy wood thinning as a part of forest management was more profitable than the baseline when the value of carbon dioxide averaged more than 15 €/CO2 and other political subsidies were unchanged. Alternatively, the price of energy wood should on average exceed 21 €/m3 on the roadside in order to be profitable in the absence of political instruments. The most cost-efficient employment of energy wood thinning occured when the dominant height was 12 meters, when energy substitution was taken into account. According to alternative forest management, thinning of sapling stands could be done earlier or less intensely than thinning based on silvicultural recommendations and the present criteria of subsidies. Consequently, the first commercial thinning could be profitable to carry out either as harvesting of industrial wood or energy wood, or as integrated harvesting depending on the costs of the harvesting methods available and the price level of small-size industrial wood compared to energy wood.
-
(2014)Purpose of this thesis is to estimate the carbon sequestration potential in eucalyptus plantations in Uruguay. This study also aims to show how beneficial these plantations are for carbon sinks. The aim of this research is calculate total carbon balance in eucalyptus plantations and compare the results to degraded lands. This study is first-of-its-kind study in Uruguay, but not unique globally. The objective was to use a modeling approach to formulate the results. The methodology of this study is based to the dynamic growth model (CO2fix V3.1). Model is developed to calculate and estimate forest carbon fluxes and stocks. In this study the model was utilized for estimating how much carbon is sequestered in eucalyptus plantations and soils. In this thesis the model was used to simulate eucalyptus forest plantations that stem from numerous studies and different data. Ad hoc Excel model was generated to form calculated results from the simulated data. A separate sensitivity analysis is also formulated to reveal a possible different outcome. The framework is based on a stand-level inventory data of forestry plantations provided by the Ministry of Uruguay (MGAP) and companies. Also multiple scientific reports and previous studies were used as guidelines for simulations and results. The forest stand, yield, soil and weather data used for this study are from three different departments. There are over 700 000 hectares of different species of eucalyptus plantations in Uruguay. The theoretical framework was tested computationally with eleven simulations. CO2fix was parameterized for fast-growing eucalyptus species used in different parts of Uruguay. The model gave outputs per hectare and then this result was scaled up to the national level. This study will also estimate how much grassland (Pampa) and former pasture land could sequester carbon. Situation prior to plantation is a baseline scenario and it is compared to the expected carbon sequestration of plantations. The model is also used to calculate the effect of changing rotation length on carbon stocks of forest ecosystem (forest vegetation and soil) and wood products. The results of this study show that currently the 707,674 hectares of eucalyptus plantations in Uruguay have the potential to sequester 65 million tonnes of carbon and reduce 238 million tonnes of CO2. The calculated carbon storage is 38 and simulated 25 million tonnes of C, products are deducted from the equation. During 22 years (1990–2012) the annual carbon sequestration benefit (afforestation-baseline) without products is 1 757 847 Mg C. The results suggest that it is reasonable to establish eucalyptus plantations on degraded, grassland (Pampa) and abandoned pasture land. The implications of the results are that eucalyptus plantations in Uruguay actually enhance carbon sequestration, are carbon sinks and store more carbon than grassland and abandoned pasture land. Plantations have a vast sequestration potential and are important in mitigating of CO2 emission and effects of the climate change. The findings endorse the significance of plantations to increase carbon sinks and this role will broaden in the future. The most relevant findings of this study are that afforestation increases the soil carbon in 10-year rotation plantations by 34% (101.1>75.6) and in 12-year rotation 38% (104.4>75.6 Mg Cha-1) in a 60-year simulation. The net (afforestation-baseline) average carbon stock benefit in the soil is 25.5 Mg C ha?1 in a 60-year simulation. The (CO2Fix) model indicate that the total average carbon sequestration for eucalyptus plantations is 92.3 Mg Cha?1. The average total carbon storage ranges from 25.8–138.5 Mg Cha?1 during a 60-year simulation. The simulations show that the net annual carbon storage in the living biomass is 29.1, 25.5 (soil) and 37.6 Mg C (products) on the average scenario. There is some fluctuation in the sequestration results in other 10 simulations. Previous studies have showed that the average carbon stock for eucalyptus plantations varies from 30–60 Mg C ha-1, when soil and products are deducted. The capacity of forest ecosystems to sequester carbon in the long run could be even more strengthened if a rotation length increases. Extending rotation from 10 to 12 years increased the average soil carbon stock from 25.5 to 28.8 Mg C (by 13%) in 60 year simulation. The results also indicate that mean annual precipitation (MAP) alters the carbon sinks of the forest ecosystem. There are some limitations in this study and they are clearly explained and analyzed. Hence, most of the results are estimations. Ministry and companies need to prolong planting of trees and even intensify annual programs in order to achieve carbon sequestration targets. Further research is needed to get an estimate of the total forest ecosystem carbon storages and fluxes.
-
(2012)The purpose of this study was to examine the integrated climatic impacts of forestry and the use fibre-based packaging materials. The responsible use of forest resources plays an integral role in mitigating climate change. Forests offer three generic mitigation strategies; conservation, sequestration and substitution. By conserving carbon reservoirs, increasing the carbon sequestration in the forest or substituting fossil fuel intensive materials and energy, it is possible to lower the amount of carbon in the atmosphere through the use of forest resources. The Finnish forest industry consumed some 78 million m3 of wood in 2009, while total of 2.4 million tons of different packaging materials were consumed that same year in Finland. Nearly half of the domestically consumed packaging materials were wood-based. Globally the world packaging material market is valued worth annually some €400 billion, of which the fibre-based packaging materials account for 40 %. The methodology and the theoretical framework of this study are based on a stand-level, steady-state analysis of forestry and wood yields. The forest stand data used for this study were obtained from Metla, and consisted of 14 forest stands located in Southern and Central Finland. The forest growth and wood yields were first optimized with the help of Stand Management Assistant software, and then simulated in Motti for forest carbon pools. The basic idea was to examine the climatic impacts of fibre-based packaging material production and consumption through different forest management and end-use scenarios. Economically optimal forest management practices were chosen as the baseline (1) for the study. In the alternative scenarios, the amount of fibre-based packaging material on the market decreased from the baseline. The reduced pulpwood demand (RPD) scenario (2) follows economically optimal management practices under reduced pulpwood price conditions, while the sawlog scenario (3) also changed the product mix from packaging to sawnwood products. The energy scenario (4) examines the impacts of pulpwood demand shift from packaging to energy use. The final scenario follows the silvicultural guidelines developed by the Forestry Development Centre Tapio (5). The baseline forest and forest product carbon pools and the avoided emissions from wood use were compared to those under alternative forest management regimes and end-use scenarios. The comparison of the climatic impacts between scenarios gave an insight into the sustainability of fibre-based packaging materials, and the impacts of decreased material supply and substitution. The results show that the use of wood for fibre-based packaging purposes is favorable, when considering climate change mitigation aspects of forestry and wood use. Fibre-based packaging materials efficiently displace fossil carbon emissions by substituting more energy intensive materials, and they delay biogenic carbon re-emissions to the atmosphere for several months up to years. The RPD and the sawlog scenarios both fared well in the scenario comparison. These scenarios produced relatively more sawnwood, which can displace high amounts of emissions and has high carbon storing potential due to the long lifecycle. The results indicate the possibility that win-win scenarios exist by shifting production from pulpwood to sawlogs; on some of the stands in the RPD and sawlog scenarios, both carbon pools and avoided emissions increased from the baseline simultaneously. On the opposite, the shift from packaging material to energy use caused the carbon pools and the avoided emissions to diminish from the baseline. Hence the use of virgin fibres for energy purposes, rather than forest industry feedstock biomass, should be critically judged if optional to each other. Managing the stands according to the silvicultural guidelines developed by the Forestry Development Centre Tapio provided the least climatic benefits, showing considerably lower carbon pools and avoided emissions. This seems interesting and worth noting, as the guidelines are the current basis for the forest management practices in Finland.
-
(2009)Tässä työssä kontortamännyn mahdollisuuksia metsätaloudessa tarkastellaan puuntuotannon kannattavuuden ja teollisen käytön sekä toimintaympäristön rajoiteiden: ympäristön, yhteiskunnan ja metsänhoidon näkökulmista. Kontortamännyn kasvatuksen kannattavuutta tarkastellaan vertaamalla sitä männyn kasvatuksen kannattavuuteen. Tarkastelu tehdään käyttämällä nettonykyarvolaskentaa. Lisäksi nettonykyarvolaskennan parametreille suoritetaan herkkyysanalyysi, jotta kontortamännyn kasvatuksen kannattavuuteen eniten vaikuttavat tekijät voidaan tunnistaa. Aiheesta tekee käytännöllisesti merkittävän kontortamännyn parempi tuottavuus suhteessa mäntyyn. Tämä vaikuttaa metsätalouden kannattavuuteen nostamalla hakkuukertymiä ja lyhentämällä kiertoaikaa. Työssä käytetyn aineiston ja simulointimenetelmän perusteella lasketut nettonykyarvot kontortamäntyskenaarioille olivat merkittävästi korkeammat kuin vastaaville mäntyskenaarioille lasketut nettonykyarvot, mikä kertoo kontortamännyn hyvästä kannattavuudesta metsänkasvatuksessa. Tuloksia tulkitessa tulee ottaa huomioon simulointimenetelmän rajoitteet sekä aineiston edustavuus. Suurimmiksi toimintaympäristöstä johtuviksi rajoitteiksi todettiin varauksellinen suhtautuminen vieraisiin puulajeihin, sertifioinnin rajoitteet sekä patologiset ja entomologiset riskit. Metsänhoidollisten tekijöiden ei todettu rajoittavan kontortamännyn käyttöönottoa. Merkittävin kysymys, mikä kontortamännyn käyttöönottoon laajassa mittakaavassa liittyy, on että kompensoiko parantunut puuntuotanto ja metsätalouden kannattavuus toimintaympäristön riskit ja rajoitteet.
-
(2014)The aim of this study is to examine the profitability of cultivation and stand rotations of Norway spruce in Finland. This information is needed by the forest owners when making decisions on forest cultivation. The results were compared to previous studies and to silviculture recommendations published by the Forestry Development Centre TAPIO’s in 2006. Forest management chains used in this study were simulated with the Forest Research Institute’s Motti program. Six different management chains in two different forest types, Oxalis-Myrtillus (OMT) and Myrtillus (MT), were simulated in the thermal area of 1300 with planting density of 1300, 1700 and 2100 per hectare. Either one, two, three or four thinnings were done for each of the planting density variations. Based on the results from these cultivations, the spruce cycle was analysed by comparing the value of the growth to alternative rates of return. Profitability calculations were based on the Motti programme and timber stumpage prices were obtained from the Metinfo service. The results showed that the optimal rotation periods were in line with previous studies. The rotation periods settled between 60–90 years depending on the rate of return that was required. However, the results were not identical to the theoretical optimum models. The Motti program forest management recommendations, are in line with the previous studies when requiring a four percent return. Sensitivity analysis of prices and costs were calculated for the rotation and based on the results, even by varying the price and cost by one third, this had very little effect on the optimal rotation time. The most important factor for the rotation period is the function of the tree's growth, which of course, is affected by the forest management measures.
-
(2013)This thesis studies market demand and supply in the voluntary forest carbon markets. The first section focuses on demand and provides an overview about the market mechanisms, buyer’s reasons to buy credits, and current demand in the markets. Supply will be studied with supply-chain approach. Supply-chain is a system moving a product or service from supplier to customer. The supply-chain section is divided into three parts. The first part finds out whether or not forests have the ability to sequester carbon and what kind of forest projects there has been. It also introduces the processes in which forest carbon credits are issued. The second part focuses on certification and verification schemes. Third part presents market places and the actors involved in carbon credit trading. Carbon markets will be evaluated on foreign and domestic basis. The aim of this thesis is to find out how well the voluntary carbon markets meet the conditions of perfect competition. The theory is based on the theory of competitive market structure and the price mechanism, where demand equals supply at the equilibrium price and quantity. The equilibrium should be found automatically within a perfectly competitive market when buyers and sellers interact. The empirical part of the study examines carbon credit issuance, project processes, certification and markets. The research questions are: 1. Do markets have infinite buyers and sellers? 2. Are products homogenous? 3. Do consumers and producers have perfect knowledge of price, utility, quality and production methods? 4. Is it easy to enter or exit the markets? The thesis is based on literature. Standards, marketplaces, and projects that were selected to the study were chosen according to the popularity based on market volume or forest-related characters. The research approach is qualitative. The collected data was analysed using content analysis. Economics and market theory form the theoretical basis of the analysis. Classification of the data is based on the theoretical framework. According to the theories a loose framework was formed to allow data reduction. Framework divides demand and supply-chain into separate parts. Research question number one is examined using a demand section. Research questions numbers 2-4 are examined using supply-chain sections. The study resulted in a conclusion that voluntary forest markets do not meet the conditions of perfect competition. Voluntary forest carbon markets are not perfectly competitive. Instead markets are uncompetitive where commodities are heterogeneous. There is only limited amount of forest projects and forestry based credits. Unit price is set to match the cost, in which case it is not determined by the market. Price-setting is possible because it is possible to differentiate projects. Imperfect competition in the market remains for mobility obstacles between markets have been set. Credit certified under certain standard, are not generally acceptable to another standard. The study results support the findings of studies conducted in the past.
-
(2011)The aim of this study was to compare economics of three different forest management scenarios in Central Finland: a single-tree selection system, a group selection system and forest management activities under Finnish Forest Management Practice Recommendations which are commonly in use in Finland. Single-tree and group selection systems are natural disturbance-based forest harvesting methods which are used to create an small-scale variation of habitats. These methods may be feasible especially in specific forest areas where the goal is to maintain the biodiversity, landscape and multiple forest use in addition to commercial use. An area managed under selection cuttings results in an uneven-aged forest structure where the diameter distribution of trees reminds the reverse-J shaped curve. Natural regeneration and periodic harvests of large sawtimber-sized trees are the most important financial benefits of uneven-aged management. However, it is still uncertain does the uneven-aged management succeed in circumstances of Finland. This study evaluated economic effects of the simulated transformation from even-aged to uneven-aged structure in Isojärvi Environmentally Valuable Forest which is under the administration of Metsähallitus and situated in Kuhmoinen. The data used in the study consist 405 Norway spruce dominated stands and 636 hectares of forest land. All simulations were made for 40 years from present with SIMO software using 3 % and 5 % interest rates. Individual tree models were used in forest development prediction and 5-year time steps in simulations of forestry operations. The aim of these simulations was to find out cutting volumes of timber assortments, discounted cashflows as well as the amount of growing stock and its variation. The automated mobile phone follow-up system with MobiDoc2 application was used to collect acceleration data, GPS-data and input data of forest machines. These data were then used to model harvesting unit costs. Finally, net present values were calculated for every management scenarios and discounted harvesting costs were reduced of these NPVs. Study results show that the NPV calculated with an interest rate of 3 % was highest for Forest Management Practice Recommendations (8076 €/ha). The NPV for single-tree selection was 91 % (7420 €/ha) and the NPV for group selection system was 99 % (8076 €/ha) of Forest Management Practice Recommendations. Comparative statics indicated that calculating NPVs with an interest rate of 5 % did not significantly affected the differences between NPVs. The unit cost of single-tree harvesting was 0,8 €/m3 lower than for thinning and 7,2 €/m3 higher than for clear cutting. The unit cost of group selection was 0,7 €/m3 higher than for clear cutting. Study results show that transformation from even-aged to uneven-aged forest structure creates economic losses even if the trees are old and the cuttings are intensive. The economic loss is an opportunity cost of continuous cover forestry.
-
(2009)Cost-effective mitigation of climate change is essential for both climate and environmental policy. Forest rotation age is one of the silvicultural measures by which the forest carbon stocks can be influenced with in accordance with the Kyoto Protocol, Article 3.4. The purpose of this study is to evaluate how forest rotation age affects carbon sequestration and the profitability of forestry. The relation between the forest rotation period optimizing forest owners’ discounted net returns over time and rotations which are 10, 20 and 30 years longer than the optimal rotation is examined. In addition, the cost of lengthening the rotation period is studied as well as whether carbon sequestration revenues can improve the profitability of forestry. The data used in the study consist of 16 stands located in Southern Finland. The main tree species in these stands were Norway spruce and Scots pine. Forest simulation tool MOTTI was used in the analysis. The results indicate that by lengthening the rotation period forest carbon stocks increase. However, as the rotation period is lengthened by more than 10 years, as a result of the diminishing growth curve, the rate of carbon sequestration slows down. The average discounted cost of carbon sequestration varied between 2.4 – 14.1 €/tCO2. Carbon sequestration rates in spruce stands were higher and the costs lower than those obtained from pine stands. The absence of carbon trading schemes is an obstacle for the commercialization of forest carbon sinks. In the future, research should concentrate on analysing what kind of operational models of carbon trading could be feasible in Finland.
-
(2014)This study examines the impact of forest industry securities on the portfolio risk in the frame of portfolio theory, and performs comparison of international forest industry enterprises as investment objects by using methods of fundamental analysis. During the past decade the global balance of forest industry has been shifting. While the demand for forest industry products in Western countries has been declining, the total demand for forest industry products on the global level has been growing. The growth of total demand has been generated by emerging markets. In Finland forest industry has been considered as a steady industry sector, which has been rewarding investors with stable profits. The previous researches show that compared to the average risk of securities, forest industry securities tend to have a lower risk. The objective of this study is to examine the geographical diversification of forest industry securities and its benefits to the risk in a Finnish stock portfolio between 2003 and 2013. The theoretical framework of this study includes portfolio theory and fundamental analysis. The principal aim of portfolio theory is to maximize expected return for a given amount of risk, or equivalently minimize risk for a given level of expected return. The risk is interpreted as variance of portfolio expected returns. By choosing securities which have only very little correlation with each other we obtain the best diversification benefits, hence minimize portfolio risk. Fundamental analysis provided key indicators for analyzing economic preconditions of the companies which reflected efficiency, solvency and market liquidity. The portfolio risk was calculated from a market portfolio, which included forest industry securities from five alternative countries; Finland, Germany, USA, Latin America, China. After including the securities to the portfolio their weight was optimized. The market portfolio was represented by OMXH CAP -return index as it consists of a weighted sum of every asset traded at Helsinki Stock Exchange, hence is perfectly diversified portfolio. The results showed that in the geographical comparison the German forest industry stocks provided the best diversification benefits. Including German forest industry stocks to a Finnish market portfolio decreased portfolio risk by 2.77 %, where the forest industry stocks of other countries where able to decrease portfolio risk less than 1 %. Compared to other countries, German forest industry stocks had the smallest correlation with OMXH CAP -return index. Performing fundamental analysis of forest industry companies on a country level did no provide explicit results what comes to the investment attractiveness as financial key indicators of companies had considerable fluctuation within a country.
-
(2013)Determining the market value of forest properties is needed for several purposes. In Finland the most used methods for valuation of forests are summation approach, income approach and market approach. Real estate valuation methods are standardized by the International Valuation Standards Council (IVSC). The council publishes standards that have been the premise for real estate valuation also in Finland. However, standard for the valuation of forests doesn’t exist due to significant problems in every method used. From International Valuation Standards Councils perspective valuation should always be market-based. Figures for the calculations should be derived from the market. This has been problematic for forest properties as the specific forest inventory data has been too expensive and difficult to collect. The new forest inventory data system of The Finnish Forest Centre, which is based on airborne laser scanning, creates new possibilities for combining the data with the market prices. This enables a better examination of the valuation methods used and a possibility for the creation of a standardized method. The purpose of this study was to compare the attributes and suitability of the most used valuation methods when determining the market value of forest properties. Research material of this study consists of 15 representative forest property transactions (areas over 10 hectares) from Central Finland and the laser scanning based inventory data of these properties. The attributes investigated were the size of correction from total value when using summation approach, the internal rate of return in the income approach, possible net income for the near future and the accuracy of these valuation methods. In addition, taxation of forest revenues, transfer taxes, administration costs of forests and trade costs were applied in examination of these methods. Processing and calculations of data were carried out with MELA, Motti, Tforest and Excel programs. The average internal rate of return was 5,3 percent and median 4,3 percent, which is similar to previous studies. Investments in forest properties are categorized to an average risk-return investment class. The correction from total value when using summation approach was similar to previous studies as it varied from -2 to -60 percent and was -26 percent on average (and -13 percent when expectation values were left out). The possible net income from these forest properties from the period of five years could cover 64 percent of market prices; however notable differences were among properties. When taking taxes, administration and trade costs into account the average internal rate of return sets down between 3 - 4 percent. The total value correction in summation approach is only -4,5 percent on average (+12,9 percent without expectation values). The problems of the valuation methods can be seen when looking at the accuracy of the methods. Standard deviation of every method varies from 25 - 35 percent when comparing them to the market values. Notable is that with a very simple method; multiplying the growing stock with the average stumpage prices, the results are as accurate as with more complex methods. The most accurate results for the whole research material were calculated with the income approach using 5 percent interest rate. Also using the summation approach and taking taxes, administration and trade costs into account was very accurate. More research is still needed for every method. Perhaps in practical valuation tasks the market value of forest properties should be investigated using multiple methods side by side, as IVSC has proposed. The results of this study are similar to previous studies and therefore support the intention for combining the new laser scanning based forest inventory data to the market prices. The use and research of extensive and up-to-date market data of forest properties could also open new possibilities in valuation of non-market benefits.
-
(2013)In this research it was studied whether non-industrial private forest owners are interested in using timber sales contracts which pricing is based on the nominal stumpage price indices published by the Finnish Forest Research Institute. In addition, it was studied, whether forest owners’ background and objectives of ownership affect the forest owners’ attitudes towards this type of timber sales contracts. Six different models of timber sales contracts were created for the research purposes. The Data consists of 16 non-industrial private forest owners from southern Finland who were interviewed with a semi-structured interview and a questionnaire. Theoretical sampling was used to select different forest owners with respect to their age, profession, gender, domicile and amount of forestland owned. The results suggest that forest owners can be classified into three groups with respect to their interest in a certain contract model. The groups are: risk takers, active sellers and investors. Risk takers were interested in the contract models which allow them to speculate with the future developments of the prices. Risk takers were typically absentee owners owning relatively small-sized forest holdings. Their dependency on forestry income was typically relatively small. Active sellers typically owned large forest holdings and were usually more dependent on timber sales income known with certainty. They were also familiar with the timber selling process which partly explains why they were usually less interested in the models. Investors were typically only interested in the contract models that allowed them to avoid or minimize risk related to the timing of timber sales. Even though timber buyers nowadays offer various types of contracts, it would benefit the timber markets as a whole if there were more flexible nad transparent ways to tailor timber sales contracts for the different types of forest owners. This would have impact especially to absentee owners owning small-sized forest holdings, who either are uncertain on the timing of the sale or appreciate opportunities to speculate with the stumpage price developments. Standardizing the pricing methods of the contracts would enhance the transparency of the pricing of the contracts and increase trust in the whole selling process.
-
(2013)The optimal harvesting for a set of even-aged Dahurian Larch (Larix gmelinii) stands located in Aershan area of the northeast of Inner Mongolia, China, are studied. The effects of catastrophic pest outbreaks (i.e. Siberian moth) on the optimal harvesting plan are also studied, and the comparison on these two cases, namely deterministic and stochastic, are analyzed. The simulation is based on an individual-tree diameter growth model, an individual-tree height model, and model for the tree mortality for the coming 5-year period. Combined with the simulation system, the optimization model modified from Hyytiäinen et al. (2005) is able to find the number of thinnings, intensity of thinning, type of thinning, subject to given rotation lengths. In even-aged management, the objective variable is the bare land value with 3.5% discount rate. In addition, a scenario approach is applied when simulating the effects of catastrophes, i.e., pest outbreaks. Stochasticity here is represented by a set of scenarios. The timing of an insect outbreak is random. In order to know the frequency of insect outbreak, an exponential model is applied. The numerical results indicate that the probability that an outbreak at epidemic level will occur within an interval of 5 years is about 0.39. Within a 10-year interval the probability is about 0.63. It is nearly certain that an outbreak at epidemic level occurs within 45 years. The optimal solutions are presented separately for deterministic and stochastic cases. For the deterministic case, the results indicate that high bare land values were associated with stands of high basal area, tree diameters and height. Typically, the higher the mean annual increment and the site quality, the higher the bare land value. Meanwhile, the results show that the optimal rotation may vary considerably (40-58 yrs) at 3.5% interest rate depending on the initial stand state. In the stochastic case, considering the effect of catastrophe of pest outbreak, numerical results show that the optimum roation is shortened and the mean values of bare land value are about 14.8% to 25.6% lower compared with the deterministic case.
-
(2010)In Finland there are over 18 million hectares of forest land which is suitable for wood production. Of this amount the proportion of private forests is over 60 %. The private forests have also an important role in the Finnish forest industry. For example, in 2008, Finnish forest industry used more than 66 million cubic meters of wood, of which 62 % came from the private forests. The change in the forest ownership structure in Finland began in the 1960s and it will continue in the future as well. As a result, nowadays the average age of the Finnish forest owner has risen to 60 years, the proportion of farmer forest owners has decreased, the proportion of urban forest owners has increased and the objectives of the forest owners have changed. Among other things, these changes have raised a threat that wood supply would possibly decrease in the future. In addition, the availability of imported wood is under a threat in the near future, because Finland’s main importing country Russia is planning significant increases in wood export duties in 2011. Then it would be more challenging to replace the possibly diminishing timber supply from private forests with imported wood. These threats created a need for this study to examine the regional utilization rates of the private forests and the Finnish forest owners’ timber sales behavior and the factors influencing it. The results of the forest utilization rates showed that the forests have already been in full use in many provinces. However, depending on the timber assortment it would have been possible to increase the loggings in 4 – 9 provinces during 2004 – 2008. In that sense, if the aim is to increase the loggings in the future, then at least in principle, it would be possible. The results of the Finnish forest owners’ timber supply and the factors affecting it showed that the most significant factors were the combinations of the forest plans, the proportion of protected areas, the prices of timber assortments, the proportion of agriculture and forestry entrepreneurs and the proportion of urban forest owners. All these factors had a positive impact on wood supply except the proportion of protected areas.
-
(2010)The European Union has stated the reduction of carbon dioxide emissions as one of the major goals in its energy policy. The Emission trading system that started in year 2005 was established to create an efficient market for emission permits and to direct the emission reductions to areas where they are most cost-efficient. Finland has committed to follow the guidelines of the emission trading system and to make notable reductions to the total level of CO2 emissions. The goal of this study is to examine how the emission trading system has affected the fuel choices in the energy sector. The purpose is to find out whether there has been substitution between the different fuel types. The substitution effects were estimated by three different methods. Also this study tries to explain what type of price elasticities the different fuels have. Additionally the effect of emission permit on the allocation of different fuels is studied. The data used in this study were gathered from 67 plants over four years. The studied fuels were aggregated into three categories: wood, peat and other fuels the fourth studied variable was the price of emission permit. The data were edited in to a panel form and were analysed in statistical program EViews. Translog function form was used to solve the elasticities for different fuel types. The results indicate that during the observation period peat acted as a base load fuel with wood and other fuels acting as peaking fuels. Peat counted for half of the total fuel consumption with wood and the other fuels both having a share of about 25%. Wood and other fuels were more price sensitive and had a higher price elasticity than peat. The increase in the price of emission permits decreased the use of peat but had only minor effect on wood and other fuels. During the first period of emission trading system the fluctuation of the permit’s price was intense and the increase in the price did not have a major effect on the fuel choices in the Finnish energy sector. The second period started in 2008 and only one year of that period was included in this study, so it is still to yearly to make any further interpretations of how the second period has effected on the fuel choices. For future studies, in the field of interfuel substitution and price elasticity, a longer time period and a data set with more plants and more fuel types could offer more accurate results and would give more insight to how the plants react to the changing conditions.
-
(2012)Climate change has been found to be one of the most serious challenges humankind has to face in the future. The link between climate change and forests is based on trees’ ability to use carbon dioxide as a raw material for growth. The growing stock sequesters carbon dioxide from the air to itself and ultimately as the forest is harvested the carbon stored is released and it moves from carbon pool of forests to another carbon pool. As the concept of emissions’ trading is applied to the investigation, a price for sequestered and released carbon can be determined. With the market price for carbon dioxide known, a net present value for the revenues and costs during the forest’s rotation period can be calculated. Using wood for different purposes, however, can result in various climatic benefits. These climatic benefits are described in this study by carbon displacement factors which can be used in determining how much the costs of releasing carbon from forests can be deducted. This study investigates the significance of forest management in a stand level from the climate change mitigation point of view in three Norway spruce (Picea abies, L.) and three Scots pine (Pinus Sylvestris, L.) stands as the previous carbon accounting aspects are taken into consideration. Stand Management Assistant (SMA) software is used in the optimization and simulation calculations. The SMA software is used for calculating the carbon accounting net present values and average carbon storages during the rotation periods of the stands included in the study with different intensities of bioenergy biomass harvesting. This way the level of biomass harvesting for bioenergy that returns with the highest net present value for carbon accounting and/or the highest average carbon storage can be calculated. The calculations are made with two interest rates, two carbon dioxide prices and with climatic benefits from bioenergy or with climatic benefits from bioenergy and forest products included. According to the results it can be stated that the intensification of forest biomass recovery for bioenergy production does not always result in the optimal climate change mitigation. The use of Norway spruce is considered of being the most potential forest-based bioenergy source in Finland. As the climatic benefits from bioenergy use were only taken into consideration, the intensification of recovery of Norway spruce biomass for bioenergy seemed to be most profitable. If, however, the climatic benefits from forest products are included in the investigation as well, the bioenergy use of Norway spruce is no longer optimal for the climate change mitigation. The climatic benefits from Norway spruce material use exceed the benefits from bioenergy use. This means that biomass recovery for bioenergy production does not necessarily result in optimal climate change mitigation.
-
(2013)The profit made through clear-cutting can be estimated easily, when keeping one s eye on the stumpage-price. However, problems arise if the consumer is to estimate the stumpage-price, making their own calculations with the interest-rate. Thus, the time used in-waiting becomes the reason for the price, whilst sales during the high-season no longer guarantee the maximum income for clear-cutting. Through this research, aim is to find out what are the financial profits and losses made by the forest owner through the clear-cutting. Calculations have been made on the assumption that the land-owner is able to transfer his or her forestry market-gains on to the Stora Enso s Tähtitili , which offers 5% interest to it s customers. This research also recognises what political and economical factors have affected stumpage prices during the research s time window, between the years 2006 and 2010. This particular research was made by analyzing the trade completed between a customer and Stora Enso, in the region of Savonian Carelia. In this analysis a proposal was put forward by Stora Enso, whereby the forest owner would put his money from the ongoing trade to their Tähtitili . Through this it became possible to find out, how much profit Tähtitili had returned. There was also another option. It was that the forest owner wouldn t have sold his forest for clear-cutting, but would have waited on the stock-market stumpage-price to offer it s best price. This way, it was to be seen what was the value of the forest whilst it still stood. By comparing these two options, it would be pos-sible to say, which of these two alternatives was more profitable. According to the findings of this research, the land-owner should not hesitate in accepting clear-cutting, on the basis that the forest is ready and capable of re-rowth. However, if the forest is not ready for regeneration, then it s not worth for regeneration. This type-of-forest holds more value whilst standing. Should the land-owner choose to follow the stumpage-price if their forest is clearly clear-cuttable, then they are at a financial loss.
-
(2009)Finnish round wood industry is reliable on Finnish nonindustrial private forest owners (NIPF) wood sales. More than half of the raw material that Finnish round wood industry uses comes from NIPF’s. Therefore, it is important for the Finnish round wood industry and for the whole economy to know the issues that have an effect on NIPF’s wood supply. This paper examines the supply of round wood in Finland using the theoretical approach of Fisherian consumption-saving model. This research examines the price elasticity of wood supply in Finland at regional level. To examine the regional markets Finland is divided to six price areas. The monthly price- and quantity data from year 1987 to 2007 is gathered from the Finnish forest research institute (METLA). This paper examines standing sale supply and delivery sale supply separately. The results show that usually price elasticity of wood supply is positive in both short-run and in long-run. The expected price variable’s effect on wood supply is negative. The results indicate that estimated short-run elasticities of supply are much greater than in earlier studies. This is because this research uses monthly data where as earlier studies have used quarterly or annual data. The estimated long-run elasticities of supply witch describe the reactions to economic trend are in the same magnitude with earlier studies. There were remarkable differences between standing sale models and delivery sale models. In the short-run delivery sale models price elasticities of supply were much smaller than in standing sale models. In the long-run the results were opposite. The results also show that there are remarkable differences between the supplies of round wood on different price areas. This result strengthens earlier research results on regional market differences in Finnish pulpwood supply.
-
(2013)Forests provide not just timber, but also a host of other benefits, such as carbon sequestration, biodiversity, recreational opportunities and beautiful scenery. From an economic perspective, such a multiplicity of utili-zation options of forests may be interpreted as joint production. However, these utilization options are often competing at least to some extent. In a changing society, the importance of non-timber benefits are increas-ing, and forest management is subject to more stringent environmental requirements. Studies have shown that targets for the use of forests have become more varied, and the interest in alternative methods of forest management has increased. The aim of this study was to create an overall picture of how environmental values are taken into account in forest economics at the stand level. Special attention was paid to uneven-aged forest management, since the method is often considered more appropriate for multi-objective forest management. Uneven-aged man-agement of forests may enable a more efficient joint production of many benefits. Nevertheless, to maintain e.g. forest biodiversity in uneven-aged stand, there is still need to ensure a robust amount of individual trees and dead wood by leaving sufficient number of retention trees. Hence, valuing environmental benefits may well have an impact on optimal stand management. In this study an optimization model is formulated to analyze uneven-aged forest management when stand-ing old trees have an environmental value. Optimization problem was solved without any time constraints or a predetermined steady state. The model was tested with both linear and nonlinear environmental valuation function. In addition, it was examined how relative value of environmental benefits and interest rate affect the structure of the stand and harvest revenues. As an alternative method, this study presented optimization of harvests while satisfying a constraint intended to meet an environmental management objective. This constraint was used to study the opportunity cost of retention trees. In conclusion, the results indicated that the valuation of environmental benefits affects the optimal harvest-ing and stand structure. When raising the interest rate, fewer retention trees should be left to the stand. The number of retention trees affects present value of harvest revenues, and the optimal solution between com-peting benefits depends on the preferences of the decision maker.
Now showing items 1-20 of 20