IDEAS home Printed from https://ideas.repec.org/a/eee/resene/v36y2014i1p166-190.html
   My bibliography  Save this article

Trade of woody biomass for electricity generation under climate mitigation policy

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0928765513000808
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.reseneeco.2013.11.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Valentina Bosetti & Carlo Carraro & Marzio Galeotti & Emanuele Massetti & Massimo Tavoni, 2006. "WITCH. A World Induced Technical Change Hybrid Model," Working Papers 2006_46, Department of Economics, University of Venice "Ca' Foscari".
    2. Emanuele Massetti & Fabio Sferra, 2010. "A Numerical Analysis of Optimal Extraction and Trade of Oil under Climate Policy," Working Papers 2010.113, Fondazione Eni Enrico Mattei.
    3. Allison Thomson & Katherine Calvin & Steven Smith & G. Kyle & April Volke & Pralit Patel & Sabrina Delgado-Arias & Ben Bond-Lamberty & Marshall Wise & Leon Clarke & James Edmonds, 2011. "RCP4.5: a pathway for stabilization of radiative forcing by 2100," Climatic Change, Springer, vol. 109(1), pages 77-94, November.
    4. Bertrand Magne, Socrates Kypreos, and Hal Turton, 2010. "Technology Options for Low Stabilization Pathways with MERGE," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    5. Gunnar Luderer & Valentina Bosetti & Michael Jakob & Marian Leimbach & Jan Steckel & Henri Waisman & Ottmar Edenhofer, 2012. "The economics of decarbonizing the energy system—results and insights from the RECIPE model intercomparison," Climatic Change, Springer, vol. 114(1), pages 9-37, September.
    6. Bosetti, Valentina & De Cian, Enrica & Sgobbi, Alessandra & Tavoni, Massimo, 2009. "The 2008 WITCH Model: New Model Features and Baseline," Sustainable Development Papers 55284, Fondazione Eni Enrico Mattei (FEEM).
    7. Robert J. Barro & Xavier Sala-i-Martin, 2003. "Economic Growth, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262025531, April.
    8. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    9. van Vuuren, Detlef P. & Stehfest, Elke & den Elzen, Michel G.J. & van Vliet, Jasper & Isaac, Morna, 2010. "Exploring IMAGE model scenarios that keep greenhouse gas radiative forcing below 3 W/m2 in 2100," Energy Economics, Elsevier, vol. 32(5), pages 1105-1120, September.
    10. Brent Sohngen & Robert Mendelsohn, 2003. "An Optimal Control Model of Forest Carbon Sequestration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 448-457.
    11. Valentina Bosetti, Carlo Carraro, Marzio Galeotti, Emanuele Massetti, Massimo Tavoni, 2006. "A World induced Technical Change Hybrid Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 13-38.
    12. Rose, Steven K. & Ahammad, Helal & Eickhout, Bas & Fisher, Brian & Kurosawa, Atsushi & Rao, Shilpa & Riahi, Keywan & van Vuuren, Detlef P., 2012. "Land-based mitigation in climate stabilization," Energy Economics, Elsevier, vol. 34(1), pages 365-380.
    13. Kenneth Gillingham & Steven Smith & Ronald Sands, 2008. "Impact of bioenergy crops in a carbon dioxide constrained world: an application of the MiniCAM energy-agriculture and land use model," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(7), pages 675-701, August.
    14. Robert J. Barro & Rachel McCleary, 2003. "Religion and Economic Growth," NBER Working Papers 9682, National Bureau of Economic Research, Inc.
    15. Nordhaus, William D & Yang, Zili, 1996. "A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies," American Economic Review, American Economic Association, vol. 86(4), pages 741-765, September.
    16. Peter M. Eisenberger & Roger W. Cohen & Graciela Chichilnisky & Nicholas M. Eisenberger & Ronald R. Chance & Christopher W. Jones, 2009. "Global Warming and Carbon-Negative Technology: Prospects for a Lower-Cost Route to a Lower-Risk Atmosphere," Energy & Environment, , vol. 20(6), pages 973-984, October.
    17. Ottmar Edenhofer , Brigitte Knopf, Terry Barker, Lavinia Baumstark, Elie Bellevrat, Bertrand Chateau, Patrick Criqui, Morna Isaac, Alban Kitous, Socrates Kypreos, Marian Leimbach, Kai Lessmann, Bertra, 2010. "The Economics of Low Stabilization: Model Comparison of Mitigation Strategies and Costs," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    18. Valentina Bosetti & Emanuele Massetti & Massimo Tavoni, 2007. "The WITCH Model. Structure, Baseline, Solutions," Working Papers 2007.10, Fondazione Eni Enrico Mattei.
    19. Havlík, Petr & Schneider, Uwe A. & Schmid, Erwin & Böttcher, Hannes & Fritz, Steffen & Skalský, Rastislav & Aoki, Kentaro & Cara, Stéphane De & Kindermann, Georg & Kraxner, Florian & Leduc, Sylvain & , 2011. "Global land-use implications of first and second generation biofuel targets," Energy Policy, Elsevier, vol. 39(10), pages 5690-5702, October.
    20. Detlef Vuuren & Elke Stehfest & Michel Elzen & Tom Kram & Jasper Vliet & Sebastiaan Deetman & Morna Isaac & Kees Klein Goldewijk & Andries Hof & Angelica Mendoza Beltran & Rineke Oostenrijk & Bas Ruij, 2011. "RCP2.6: exploring the possibility to keep global mean temperature increase below 2°C," Climatic Change, Springer, vol. 109(1), pages 95-116, November.
    21. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daigneault, Adam & Favero, Alice, 2021. "Global forest management, carbon sequestration and bioenergy supply under alternative shared socioeconomic pathways," Land Use Policy, Elsevier, vol. 103(C).
    2. Lucjan Pawłowski & Małgorzata Pawłowska & Cezary A. Kwiatkowski & Elżbieta Harasim, 2021. "The Role of Agriculture in Climate Change Mitigation—A Polish Example," Energies, MDPI, vol. 14(12), pages 1-13, June.
    3. Alice Favero & Robert Mendelsohn & Brent Sohngen, 2017. "Using forests for climate mitigation: sequester carbon or produce woody biomass?," Climatic Change, Springer, vol. 144(2), pages 195-206, September.
    4. Favero, Alice & Mendelsohn, Robert & Sohngen, Brent, 2016. "Carbon Storage and Bioenergy: Using Forests for Climate Mitigation," MITP: Mitigation, Innovation and Transformation Pathways 232215, Fondazione Eni Enrico Mattei (FEEM).
    5. Lee, Chien-Chiang & Wang, Chih-Wei & Ho, Shan-Ju & Wu, Ting-Pin, 2021. "The impact of natural disaster on energy consumption: International evidence," Energy Economics, Elsevier, vol. 97(C).
    6. Chen, Guang & Kong, Rui & Wang, Yixin, 2020. "Research on the evolution of lithium trade communities based on the complex network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 540(C).
    7. 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.
    8. Alice Favero & Robert Mendelsohn, 2014. "Using Markets for Woody Biomass Energy to Sequester Carbon in Forests," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(1), pages 75-95.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alice Favero & Robert Mendelsohn, 2013. "Evaluating the Global Role of Woody Biomass as a Mitigation Strategy," Working Papers 2013.37, Fondazione Eni Enrico Mattei.
    2. Favero, Alice & Mendelsohn, Robert & Sohngen, Brent, 2016. "Carbon Storage and Bioenergy: Using Forests for Climate Mitigation," MITP: Mitigation, Innovation and Transformation Pathways 232215, Fondazione Eni Enrico Mattei (FEEM).
    3. Alice Favero & Robert Mendelsohn, 2014. "Using Markets for Woody Biomass Energy to Sequester Carbon in Forests," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(1), pages 75-95.
    4. Carraro, Carlo & Favero, Alice & Massetti, Emanuele, 2012. "“Investments and public finance in a green, low carbon, economy”," Energy Economics, Elsevier, vol. 34(S1), pages 15-28.
    5. Michetti, Melania & Parrado, Ramiro, 2012. "Improving Land-use modelling within CGE to assess Forest-based Mitigation Potential and Costs," Climate Change and Sustainable Development 122862, Fondazione Eni Enrico Mattei (FEEM).
    6. Bosetti, Valentina & Carraro, Carlo & De Cian, Enrica & Massetti, Emanuele & Tavoni, Massimo, 2013. "Incentives and stability of international climate coalitions: An integrated assessment," Energy Policy, Elsevier, vol. 55(C), pages 44-56.
    7. Bastianin, Andrea & Favero, Alice & Massetti, Emanuele, 2010. "Investments and Financial Flows Induced by Climate Mitigation Policies," Sustainable Development Papers 59418, Fondazione Eni Enrico Mattei (FEEM).
    8. Steckel, Jan Christoph & Brecha, Robert J. & Jakob, Michael & Strefler, Jessica & Luderer, Gunnar, 2013. "Development without energy? Assessing future scenarios of energy consumption in developing countries," Ecological Economics, Elsevier, vol. 90(C), pages 53-67.
    9. Emanuele Massetti, 2011. "Carbon tax scenarios for China and India: exploring politically feasible mitigation goals," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 11(3), pages 209-227, September.
    10. Brigitte Knopf & Yen-Heng Henry Chen & Enrica De Cian & Hannah Förster & Amit Kanudia & Ioanna Karkatsouli & Ilkka Keppo & Tiina Koljonen & Katja Schumacher & Detlef P. Van Vuuren, 2013. "Beyond 2020 — Strategies And Costs For Transforming The European Energy System," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(supp0), pages 1-38.
    11. Massetti, Emanuele & Ricci, Elena Claire, 2013. "An assessment of the optimal timing and size of investments in concentrated solar power," Energy Economics, Elsevier, vol. 38(C), pages 186-203.
    12. Bosetti, Valentina & Carraro, Carlo & Duval, Romain & Tavoni, Massimo, 2011. "What should we expect from innovation? A model-based assessment of the environmental and mitigation cost implications of climate-related R&D," Energy Economics, Elsevier, vol. 33(6), pages 1313-1320.
    13. Emanuele Massetti & Lea Nicita, 2010. "The Optimal Climate Policy Portfolio when Knowledge Spills across Sectors," CESifo Working Paper Series 2988, CESifo.
    14. Milan Ščasný & Emanuele Massetti & Jan Melichar & Samuel Carrara, 2015. "Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(2), pages 383-415, October.
    15. De Cian, Enrica & Tavoni, Massimo, 2012. "Do technology externalities justify restrictions on emission permit trading?," Resource and Energy Economics, Elsevier, vol. 34(4), pages 624-646.
    16. Bosello, Francesco & Carraro, Carlo & De Cian, Enrica, 2013. "Adaptation can help mitigation: an integrated approach to post-2012 climate policy," Environment and Development Economics, Cambridge University Press, vol. 18(3), pages 270-290, June.
    17. Bosetti, Valentina & Longden, Thomas, 2013. "Light duty vehicle transportation and global climate policy: The importance of electric drive vehicles," Energy Policy, Elsevier, vol. 58(C), pages 209-219.
    18. Shardul Agrawala & Francesco Bosello & Carlo Carraro & Kelly De Bruin & Enrica De Cian & Rob Dellink & Elisa Lanzi, 2011. "Plan Or React? Analysis Of Adaptation Costs And Benefits Using Integrated Assessment Models," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 175-208.
    19. Bosetti, Valentina & Carraro, Carlo & Massetti, Emanuele, 2009. "Banking permits: Economic efficiency and distributional effects," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 382-403, May.
    20. BRECHET, Thierry & THENIE, Julien & ZEIMES, Thibaut & ZUBER, Stéphane, 2010. "The benefits of cooperation under uncertainty: the case of climate change," LIDAM Discussion Papers CORE 2010062, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    More about this item

    Keywords

    BECCS; Woody biomass trade; IAM; Negative emissions; Carbon market;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:resene:v:36:y:2014:i:1:p:166-190. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505569 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.