Economy-wide effects of forestry development scenarios in rural Scotland K.J. Thomson a, * , D. Psaltopoulos b a School of Resources, Environment and Society, University of Aberdeen, Aberdeen AB24 5UA, Scotland, UK b Department of Economics, University of Patras, Patras, Rio 26500, Greece Received 3 October 2002; received in revised form 2 July 2003; accepted 14 July 2003 Abstract The paper investigates the economic impacts of alternative forestry development scenarios on the rural economy of Scotland. The projections of a forestry development model, concerning the planting, harvesting and wood-processing sectors up to the year 2050, are set as exogenous to a regionalised input – output table for rural Scotland, in order to calculate how changes in the output of these forest-related sectors affect other sectors in terms of output, income and market-related employment. Six future development scenarios are presented and applied under three alternative wood-usage assumptions. The impacts of exogenously set forestry output changes on the rural Scottish economy are found to be significant, especially if all additional timber is processed by regional wood processors. D 2003 Elsevier B.V. All rights reserved. Keywords: Scottish forestry; Regional input – output; Impact analysis 1. Introduction A number of developments are expected to result in the gradual transition of Western European agri- culture towards world market conditions and therefore to influence rural areas significantly. These include recent and possible future reforms of the common agricultural policy (CAP), including those necessi- tated by EU enlargement, and the 1994 WTO Uru- guay Round Agreement on agriculture plus the impact of a possible agreement within the current WTO Doha Development Agenda negotiations. In the remoter areas of Europe, forestry of some kind is obviously the most likely alternative productive use of agricul- tural land, if simple abandonment is rejected: ‘for the problems which beset the very marginal areas, ...development outlook will be jeopardised unless...a a forestry activity is gradually built-up’ (European Commission, 1988). This paper presents an extension of work con- ducted as part of a tripartite study of Afforestation in Rural Development in Scotland, Northern Ireland and the Republic of Ireland (Gardiner et al., 1994). Much of the land in these countries shares character- istics common to other parts of the EU, e.g. depopu- lation, remoteness from main population centres, and adverse soil and climatic conditions. Additionally, much new forestry planting in the British Isles has concentrated in these areas. However, the specificities 1389-9341/$ - see front matter D 2003 Elsevier B.V. All rights reserved. doi:10.1016/j.forpol.2003.07.005 * Corresponding author. Tel.: +44-1224-274138; fax: +44- 1224-273487. E-mail address: k.j.thomson@abdn.ac.uk (K.J. Thomson). www.elsevier.com/locate/forpol Forest Policy and Economics 7 (2005) 515 – 525