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Trade of woody biomass for electricity generation under climate mitigation policy

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  • Favero, Alice
  • Massetti, Emanuele

Abstract

Bio-energy with carbon capture and sequestration (BECCS) has the potential to be a key mitigation option, because it can generate electricity and absorb emissions at the same time. However, biomass is not distributed evenly across the globe and regions with a potentially high demand might be constrained by limited domestic supply. Therefore, climate mitigation policies might create the incentive to trade biomass internationally. This paper uses scenarios generated by the integrated assessment model WITCH to study trade of woody biomass from multiple perspectives: the volume of biomass traded, its value, the impact on other power generation technologies and on the efficiency of mitigation policy. The policy scenarios consist of three representative carbon tax policies (4.8W/m2, 3.8W/m2 and 3.2W/m2 radiative forcing values in 2100) and a cap-and-trade scheme (3.8W/m2 in 2100). Results show that the incentive to trade biomass is high: at least 50% of biomass consumed globally is traded internationally. Regions trade 13–69EJ/yr of woody biomass in 2050 and 55–81EJ/yr in 2100. In 2100 the value of biomass traded is equal to US$ 0.7–7.2 Trillion. Trade of woody biomass substantially increases the efficiency of the mitigation policy. In the tax scenarios, abatement increases by 120–323Gt CO2 over the century. In the cap-and-trade scenario biomass trade reduces the price of emission allowances by 34% in 2100 and cumulative discounted policy costs by 14%.

Suggested Citation

  • Favero, Alice & Massetti, Emanuele, 2014. "Trade of woody biomass for electricity generation under climate mitigation policy," Resource and Energy Economics, Elsevier, vol. 36(1), pages 166-190.
  • Handle: RePEc:eee:resene:v:36:y:2014:i:1:p:166-190 DOI: 10.1016/j.reseneeco.2013.11.005
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    1. repec:spr:climat:v:144:y:2017:i:2:d:10.1007_s10584-017-2034-9 is not listed on IDEAS
    2. Piwowar, Arkadiusz & Dzikuć, Maciej, 2016. "Outline of the economic and technical problems associated with the co-combustion of biomass in Poland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 415-420.

    More about this item

    Keywords

    BECCS; Woody biomass trade; IAM; Negative emissions; Carbon market;

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • F18 - International Economics - - Trade - - - Trade and Environment

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