Assessing economic impacts of internet adoption through reduced pulp and paper demand

Abstract

We use a dynamic, global computable general equilibrium (CGE) model to capture the economic impacts of internet adoption, modeled through reduced demand in the newsprint and printing and writing paper (pulp and paper) industries. Global newsprint consumption is estimated to fall dramatically by 2030. We rely on estimates from another study that captures the change in global pulp and paper consumption using the global forest products model (GFPM), based on two scenarios: (i) full per capita internet adoption by 2100 and (ii) more rapid full internet adoption by 2050. We incorporate reductions in pulpwood consumption into a global multiregional dynamic CGE model to estimate economy-wide impacts in Canadian provinces, the United States, and the rest of the world. Results indicated that the year 2050 internet adoption scenario would result in a reduction in cumulative discounted gross domestic product (GDP) by as much as 17% in some regions of Canada, reduce GDP by 5.8% in the United States, and increase GDP by 3.3% in the rest of the world from 2006 to 2030. These findings highlight the costs of internet adoption, leaving net benefit analysis of adoption to future work.