Current issue: 54(2)
This paper designs an Economy-Welfare-Environment Adjustment System model (EWEAS model or EWE model in short) which consists of the circular flow of the economic, the welfare, and the environment system of forestry. That is, this model builds the relationship between the systems for material wealth and that for mental wealth.
The EWE model is designed as a complete open system model which describes the economy-welfare-environment circular system in forestry by linking up the internal system of forestry with the surrounding external systems. The EWE model can be manipulated as a policy formation or a policy decision model, and it is available for policy evaluation in the economic, the welfare and the environmental phase of forestry. The model is a basic simulation system model which is reliable in its reproductive fitness, stability and universality. Thus, this model ought to be useful in any country in the world as well as in Japan.
Standard methods of welfare economics are used in a market simulating framework to evaluate policy measures designed to increase future timber supplies. Forest management cost-share programs are examined using this methodology. The differential regional impact of cost-share payments is considered, as is the distribution of these benefits between stumpage producers (owners of forest land) and stumpage consumers (producers of forest products). Previous estimates of the welfare gains that would result from a higher level of forest management cost-share payments in the southern United States are revised to account for the loss of public revenue resulting from lower future prices. A methodology for comparing alternative policy instruments is discussed, and a preliminary, qualitative comparison is made between the use of cost-share payments and alternative policy measures.