Modeling the global and Asia-Pacific forest sectors -: Experiences and prospects

Experience with a hierarchical world model of production, consumption, and trade Global Forest Product Model (GFPM), with Asia-Pacific as a subregion, confirms that equilibrium theory is a powerful way of getting coherent forecasts of many interacting forest economies. The GFPM model has produced forecasts at country and commodity level that are useful for Food and Agriculture Organization of the United Nations (FAO) global and regional outlook studies. However, several areas of improvement exist. The modeling work has revealed many shortcomings of the basic national statistics. The regional submodels are currently being replaced with a single model considering all countries simultaneously. The econometric demand equations can still be improved, especially their price elasticities. International econometric wood supply equations are almost nonexistent, and alternative models of wood supply need to be developed. The description of technology by activity analysis is powerful, but the comparative cost of production in different countries can be improved. The dynamics of trade flows and capacity expansion still require adjustments and perhaps new theory. Still, operational regional and global forest sector models are now available to individual analysts, giving them the means to produce their own forecasts, based on alternative scenarios of global growth and forest policies.