Forest Management, Conservation, and Global Timber Markets

Abstract This article develops a global timber market model which captures how timber supply reacts to future predicted increases in the demand for timber. Higher future demand is expected to increase prices, increase investments in regeneration, increase establishment of plantations, and expand output. Dynamic market responses imply a greater reliance on plantations in productive regions, allowing large areas of natural forest in low‐valued regions to remain largely intact. Sensitivity analysis suggests that price, harvest, and management are most sensitive to the rate of demand increase, the interest rate, the cost of plantations, and access costs of natural forests. Two forest conservation strategies are examined which predict the system‐wide implications of forest conservation in Europe and North America. The policies indicate that whereas set asides can induce net conservation, harvests increase elsewhere, particularly in natural forests.