BASED SECTOR – COMBINING QUANTITATIVE … 2015 - Uppsala, Sweden - 2015.08.20 2 FORESIGHT FOR THE...

SSAFR 2015 - Uppsala, Sweden - 2015.08.20 2

FORESIGHT FOR THE FOREST-BASED SECTOR – COMBINING QUANTITATIVE AND QUALITATIVE APPROACHES

Hans Fredrik Hoen, NMBU, Elias Hurmekoski and Lauri Hetemäki, EFI/UEFSSAFR 2015,Uppsala, Sweden – 2015.08.20

Norwegian University of Life Sciences

1. Why are existing forest sector outlook studies not capturing some important changes in the European forest sector?a) Structural changesb) Policy-signals and drivers

• Global• European

2. Can we improve on this, and if so, how?

Presentation based on:1. Hetemäki, L. 2014 (ed.). Future of the European Forest Based Sector: Structural

Changes Towards Bioeconomy, EFI What Science Can Tell Us –report, No. 6.2. Hurmekoski, E. & Hetemäki, L. (2013). Studying the Future of the Forest Sector:

Review and Implications for Long-Term Outlook Studies. Forest Policy and Economics, 34, 17–29.


Roadmap:


Global Forest Products Markets are Going Through Major Structural Changes

Maybe the biggest changes for a century, because:1. Policy drivers - Climate Change2. Emerging economies and changing competitive

advantages3. Many impacts of digital information technology4. New forest-based products5. Services – the great megatrend of the 21st Century

Norwegian University of Life SciencesSSAFR 2015 - Uppsala, Sweden - 2015.08.20 4

5

Photo: H.F. Hoen

1.a) Outlook for European Paper and Paperboard Changing (excl. Russia)


1.a) Outlook for European SawnwoodProduction: A big question mark (excl. Russia)


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The current state of the European forest‐based sector could be labelled as one of Creative Destruction

JosephSchumpeter

SSAFR 2015 - Uppsala, Sweden - 2015.08.20 Norwegian University of Life Sciences

1.a) Tofte pulp-mill, capacity 400 kton pulp,Operation opened 1981 - closed down 2013


Photo: Helge Høifødt


• Global– The new climate economy report, September 16th 2014– UN Climate Summit on September 23rd 2014, New York– IPCC AR V Synthesis report (nov. 2014)

• EU– EC-documents– Horizon 2020– EU 2030-targets

• National– Governmental declaration Oct. 2013 Norway


1.b) Policy-signals


The New Climate Economy Report 2014.09.16

• Commissioned by seven countries: Colombia, Ethiopia, Indonesia, Norway, South Korea, Sweden and the United Kingdom – as an independent initiative to report to the international community

• Chapter three: Land use– Protecting food, forests, and people– The Commission recommends that developed countries aim to

provide at least US$5 billion per year in REDD+ financing (increasingly to payments for verified emission reductions)

– The Commission recommends that countries commit to restoring 350 million ha forest land by 2030, and promptly begin to do so

SSAFR 2015 - Uppsala, Sweden - 2015.08.20 11Norwegian University of Life Sciences

UN: Climate summit - New York, Sept 2014

At the Climate Summit on September 23rd 2014 in New York, at the invite of the UN Secretary-General, global leaders from Government, business, finance and civil society came together to announce bold commitments to action in areas that are critical for keeping global temperature increases to less than two degrees Celsius.

The eight Action Areas are:

Agriculture | Cities | Energy | Financing | Forests | Industry| Resilience | Transportation


«New York declaration on Forests»:

• At least halve the rate of loss of natural forests globally by 2020 and strive to end natural forest loss by 2030.

• Restore 150 million hectares of degraded landscapes and forestlands by 2020 and significantly increase the rate of global restoration thereafter, which would restore at least an additional 200 million hectares by 2030.

• Include ambitious, quantitative forest conservation and restoration targets for 2030 in the post-2015 global development framework, as part of new international sustainable development goals.

• Combined, this could avoid between 4.5 and 8.8 billion tons of carbon dioxide emissions each year by 2030. That is equivalent to removing the carbon emissions produced by the one billion cars that are currently on the world’s roads.


IPCC AR V Synthesis report, Nov. 1st 2014

• Global carbon price ≈ cost-efficiency• “Depending on the level of overshoot, overshoot scenarios

typically rely on the availability and widespread deployment of bioenergy with carbon capture and storage (BECCS) and afforestation in the second half of the century.” page 15

• “Many models could not limit likely warming to below 2ºC if bioenergy, CCS, and their combination (BECCS) are limited (high confidence).” page 17

• “The most cost-effective mitigation options in forestry are afforestation, sustainable forest management and reducing deforestation, with large differences in their relative importance across regions; (medium evidence, high agreement).” page 19


• EU leaders agreed on 23 October 2014 the domestic 2030 greenhouse gas reduction target of at least 40% compared to 1990

– The sectors covered by the EU emissions trading system (EU ETS) would have to reduce their emissions by 43% compared to 2005

– Emissions from sectors outside the EU ETS would need to be cut by 30% below the 2005 level

• Aims to make the European Union's economy and energy system more competitive, secure and sustainable

• Sets a target of at least 27% for renewable energy and energy savings by 2030


Policy-signals – EU 2030-targets


Political winds in favour of restructuring the FBS:

EU Horizon 2020 – third (thematic) pillar: Societal Challenges

2. Food security, sustainable agriculture and forestry, marine and maritime and inland water research, and the Bioeconomy;

3. Secure, clean and efficient energy;4. Smart, green and integrated transport;5. Climate action, environment, resource efficiency and raw

materials;Norwegian governmentPolitical platform of Oct. 2013 mentions FBS 20 times (in 76 pages)The government will: Draw up an integrated strategy for the forestry value chain : FOREST22SSAFR 2015 - Uppsala, Sweden - 2015.08.20 16

Policy-signals - EU

European Commission (EC). 2012. Innovating for sustainable growth. A bioeconomy for Europe. Brussels: European Commission.European Commission (EC). 2013a. A new EU foreststrategy: for forests and the forest-based sector. Brussels: European Commission. COM(2013) 659 final.European Commission (EC). 2013b. A Blueprint for the EU Forest-Based Industries. Brussels: European Commission. Brussels, 20.9.2013, SWD(2013) 343 final.


What about the new forest bioeconomy products?

“We can do (almost) everything from wood”

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7.9.2015 177.9.2015 177.9.2015 177.9.2015 1717


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“New” products: Not much information to build on

7.9.2015 18

Biofuels

Increasing demand in textile markets to replace e.g. cotton and polyester

Increasing demand in transportation sector

Increasing demand for low CO2, healthy and cost competitive construction material

Forest biomass


Big question mark impacting the future:EU and global climate and renewable energy policies

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7.9.2015 19

SSAFR 2015 - Uppsala, Sweden - 2015.08.20

What happens at, and after, COP in Paris 2015?

Need for a comprehensive reassessment!


?

Services: Basically no information/outlook


Key challenges:1. Structural changes – what happens with

existing industries and products? (can currentmodels provide reasonable outlooks?)

2. New products (no empirical data available)3. Outlook for services in the FBS (data issues,

little research on this so far)


Paradox for outlook studies?• Fundamental dilemma related to all future-oriented research:

How can the future be studied, as it does not yet exist?

• No method can yield “correct” or even reliable information of the future

• Therefore, the relevant question is: how useful the studies are?

• If the purpose is to provide policy support or strategic information on medium-to long-term development, little point to perform purely forecasting or model analysis based only on the current structures



Proposal:• Combine, and iterate, qualitative foresight (expert panels,

Delphi-approaches, +++, in participatory excercises) withupdated and «innovative» forest-sector models (FSM)

• By this provide decision support and relevant informationto policy makers and stakeholders

• A typical policy question (demand): How can the FBS double its value added within 15 years?

– Increase profits and/or cut costs– Much will probaly have to rely on new products?


Using Backcasting, Expert Analysis and Updated Forest Sector Models to Study This

1. Use economics, politics, technology analysis, and other expert analysis to backcast how the industry could get to desired situation in 2030

2. Use forest sector models to analyze what this would require from the markets (experiment with different parameters (elasticities) and including new products and manufacturing in the models)

3. Use forest sector models and expert analysis to analyze the impacts of the backcasting scenarios to markets

4. It will not be easy, but could be useful and indeed very interesting (at least for those involved)


Illustration


Possible contribution:• Information to policy makers and stakeholders

about medium to long term market developmentsand consequences of alternative choices, desicions and strategies

– potential for value added– employment– effects on GHG-accounts– sustainable timber production and balancing of multiple

ecosystem services



Białowieża National Park, PolandPhoto: H.F. Hoen


29From Norefjell March 2014, two-hour drive from OsloPhoto: H.F. Hoen

Thanks for your attention!

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