Modelling European Forest Products Consumption and Trade in a Context of Structural Change.

Summary The forests of the European Union grow by 1.2 billion m³ per year. Half of this volume remains in the forest. The other half feeds three industrial sectors: the materials sector, the paper sector and the energy sector. These industrial product flows are set in motion and financed by various consumers. However, since 2000, consumption has been changing, to the point of strongly disrupting certain wood flows and impacting employment and the sector's trade balance. To predict the impact of these changes, economists model the relationships between raw material supply, finished product demand, prices, production and international trade. This thesis constructs an empirical model to assess the impact of these changes for the European forestry sector.An introductory chapter defines the context of the forest resources and products analyzed at the macroeconomic level. Then I present the main partial equilibrium models used for prospective studies of the forestry and wood sector. From a general framework including production and international trade, I detail the specific problems encountered when estimating demand functions. A second chapter studies the potential impact of a trade agreement between the European Union and the United States on the forestry sector. We find that total welfare would increase in the region of the agreement and decrease slightly elsewhere. Moreover, the agreement is more beneficial to consumers than to producers. The results also show that third countries are impacted by the agreement, which highlights the importance of using a global model. In a third chapter, I estimate the price and income elasticities of demand for forest products on a panel of European countries. I deal with panel non-stationarity problems and estimate elasticities within cointegrated panels. The demand elasticities are lower than previous estimates in the literature. These robust elasticities inserted in a forestry-wood sector model project a lower demand over a 20-year period. In a fourth chapter, I analyze structural changes in paper consumption. I use an econometric panel data model to estimate threshold effects in the relationship between the use of information technology and paper consumption: newsprint, printing paper and writing paper. I show how the elasticity of demand for paper depends on the penetration of the Internet in the population. A threshold effect occurs when the majority of a population has access to the internet. After the threshold, the coefficients linking consumption and its explanatory variables (price and income) decrease in absolute value or change sign. From a projection of the number of internet users per country, projections of paper consumption could be updated with this type of transition model. Lower paper demand frees up resources for the development of other innovative forest products and services.