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Damned if you do, damned if you do not--Reduced Climate Impact vs. Sustainable Forests in Sweden

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  • Geijer, Erik
  • Bostedt, Göran
  • Brännlund, Runar

Abstract

The main objective of this paper is to analyze the potential goal conflict between two of Sweden's environmental objectives: Sustainable Forests and Reduced Climate Impact - or, more precisely, the conflict between forest conservation and the supply of wood fuel. To accomplish this, we use a forest sector model that includes the suppliers and major users of roundwood. The econometric results, based on a data set that spans 40 years, show that all the own price elasticities have the expected signs. Among the three forestry products, the supply and (long-term) demand of forest fuel seems to be most sensitive to a price change. In a second step, the estimated model is used to simulate the effect of increased forest conservation - the Sustainable Forest objective - on the supply of wood fuel. If oil is used as a substitute, Swedish emissions of greenhouse gases will increase by almost 0.92 percent, which indicates a clear conflict with the Reduced Climate Impact objective.

Suggested Citation

  • Geijer, Erik & Bostedt, Göran & Brännlund, Runar, 2011. "Damned if you do, damned if you do not--Reduced Climate Impact vs. Sustainable Forests in Sweden," Resource and Energy Economics, Elsevier, vol. 33(1), pages 94-106, January.
  • Handle: RePEc:eee:resene:v:33:y:2011:i:1:p:94-106
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    References listed on IDEAS

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    1. Diewert, W. E., 1973. "Functional forms for profit and transformation functions," Journal of Economic Theory, Elsevier, vol. 6(3), pages 284-316, June.
    2. Linden, Mikael & Uusivuori, Jussi, 2002. "Econometric analysis of forest conservation: the Finnish experience," Environment and Development Economics, Cambridge University Press, vol. 7(02), pages 281-297, May.
    3. Brent Sohngen & Robert Mendelsohn & Roger Sedjo, 1999. "Forest Management, Conservation, and Global Timber Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 1-13.
    4. Torjus Bolkesjø & Erik Trømborg & Birger Solberg, 2005. "Increasing Forest Conservation in Norway: Consequences for Timber and Forest Products Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(1), pages 95-115, May.
    5. Leppanen, Jussi & Linden, Mika & Uusivuori, Jussi & Pajuoja, Heikki, 2005. "The private cost and timber market implications of increasing strict forest conservation in Finland," Forest Policy and Economics, Elsevier, vol. 7(1), pages 71-83, January.
    6. Runar Brannlund & Per-Olov Marklund & Magnus Sjostrom, 2004. "Evaluating market efficiency without price data: the Swedish market for wood fuel," Applied Economics, Taylor & Francis Journals, vol. 36(1), pages 31-39.
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    Citations

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    Cited by:

    1. Munnich Vass, Miriam & Elofsson, Katarina, 2013. "Is forest sequestration at the expense of bioenergy and forest products cost-effective in EU climate policy to 2050?," Working Paper Series 2013:9, Swedish University of Agricultural Sciences, Department Economics.
    2. Elofsson, Katarina & Gren, Ing-Marie, 2013. "Should forests be used as uncertain carbon sinks or uncertain fossil fuel substitutes in the EU Roadmap to 2050?," Working Paper Series 2013:8, Swedish University of Agricultural Sciences, Department Economics.
    3. Lundmark, Robert & Olsson, Anna, 2015. "Factor substitution and procurement competition for forest resources in Sweden," International Journal of Production Economics, Elsevier, vol. 169(C), pages 99-109.
    4. Vass, Miriam Münnich & Elofsson, Katarina, 2016. "Is forest carbon sequestration at the expense of bioenergy and forest products cost-efficient in EU climate policy to 2050?," Journal of Forest Economics, Elsevier, vol. 24(C), pages 82-105.
    5. Brännlund Runar & Carlén Ola & Lundgren Tommy & Marklund Per-Olov, 2012. "The Costs and Benefits of Intensive Forest Management," Journal of Benefit-Cost Analysis, De Gruyter, vol. 3(4), pages 1-25, December.
    6. Geijer, Erik & Andersson, Jon & Bostedt, Göran & Brännlund, Runar & Hjältén, Joakim, 2014. "Safeguarding species richness vs. increasing the use of renewable energy—The effect of stump harvesting on two environmental goals," Journal of Forest Economics, Elsevier, vol. 20(2), pages 111-125.

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