Initial production capacities for forest industry final products
are based on production quantities from FAOSTAT (2013). After the
base year the capacities evolve according to investment dynamics,
which depend on depreciation rate and investment costs. The
investment pay-back time is assumed to be 10 years, which is the
time step of the model. The annual depreciation rate is assumed to
be 0.03, which approximates to 30 average capital operating times.
Capital operating times and investment costs are based on the
engineering literature (e.g., Diesen, 1998).