Woody biomass production costs consist of harvest and transport costs. Harvest costs are modeled by using spatially explicit
constant unit costs. Transport costs are not spatially explicit but
are modeled by using regional level constant elasticity transport
cost functions, which approximate the short run availability of
woody biomass in each region.9 Transport costs functions are
shifted over time in response to the changes in the harvested
volumes such that in the long run only average transport costs
matters. There are several institutional factors like building forest
roads and transport capacity limitations that make woody biomass
supply less elastic in the short run than in the long run (Binkley
and Dykstra, 1987).