Finnish economy and alternatives available to the forest sector

The effects of the development of the forest sector on the development trends of Finnish national economy are analysed in this report. The analysis extends to the year 2005. Factors taken as indicators of the economic development are gross national product, total exports, employment, energy and carbon dioxide emissions. The impact analyses were performed using the FMS model system which contains a multi-branch econometric simulation model which can be used to provide a long-term analysis of the national economy. A disaggregated forest economy sector was developed for use in the system. The most significant outcome of the forest economy sensitivity analyses was that any expansion in highly refined timber products will contribute more profoundly to the expansion of the entire economy than chemical wood processing could, as the capital investments required by the latter tend to absorb and replace other economic activities. As far as comprehensive development scenarios are concerned, only small-scale effects were observed in the case of the gross national product, due to the replacement effect. On the other hand, expansion was predicted to have a profound effect on energy consumption and carbon dioxide emissions in the country's total economy, particularly as regards the extreme scenarios (12 refs., 6 tabs., 1 fig.)