Distributive Impacts of Forest Resource Policies in Alberta

Abstract

Economy-wide and distributive impacts of: (1) an $80 million increase in pulp and paper exports; (2) a $10 million decrease in lumber exports; (3) a 25% increase in the costs of timber production; and (4) a 25% increase in the costs of pulp and paper production in Alberta's forest sector are examined. A social accounting matrix (SAM)-based quantity model is used to examine the first two shocks, while a SAM-based price model is used to analyze the last two shocks. The results of the quantity model suggest that higher income households get a larger share of the benefits than lower income households in response to an expansion in the pulp and paper industry. A contraction in the lumber sector will hurt higher income households more than lower income households. Larger shares of medium and higher income households in total labor income and capital rents are identified as reasons for this asymmetric response. The results of the price model suggest that additional costs associated with sustainable forest management and environmental regulations will hurt lower income households more than higher income households. The higher share of consumer expenditure in total income for lower income households when compared to that of high income households may be responsible for this result. For. Sci. 45(3):342-348.

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