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Forestry and the Carbon Market Response to Stabilize Climate

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  • Tavoni, Massimo
  • Bosetti, Valentina
  • Sohngen, Brent

Abstract

This paper investigates the potential contribution of forestry management in meeting a CO2 stabilization policy of 550 ppmv by 2100. In order to assess the optimal response of the carbon market to forest sequestration we couple two global models. An energy-economy-climate model for the study of climate policies is linked with a detailed forestry model through an iterative procedure to provide the optimal abatement strategy. Results show that forestry is a determinant abatement option and could lead to significantly lower policy costs if included. Linking forestry management to the carbon market has the potential to delay the policy burden, and is expected to reduce the price of carbon of 40% by 2050. Biological sequestration will mostly come from avoided deforestation in tropical forests rich countries. The inclusion of this mitigation option is demonstrated to crowd out some of the traditional abatement in the energy sector and to lessen induced technological change in clean technologies.

Suggested Citation

  • Tavoni, Massimo & Bosetti, Valentina & Sohngen, Brent, 2007. "Forestry and the Carbon Market Response to Stabilize Climate," Climate Change Modelling and Policy Working Papers 10263, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcc:10263
    DOI: 10.22004/ag.econ.10263
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    References listed on IDEAS

    as
    1. Vincent Gitz & Jean Charles Hourcade & Philippe Ciais, 2005. "The timing of biological carbon sequestration and carbon abatement in the energy sector under optimal strategies against climate risks," Working Papers hal-00866426, HAL.
    2. Vincent Gitz & Jean-Charles Hourcade & Philippe Ciais, 2006. "The Timing of Biological Carbon Sequestration and Carbon Abatement in the Energy Sector Under Optimal Strategies Against Climate Risks," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 113-134.
    3. 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".
    4. Vincent Gitz & Jean Charles Hourcade & Philippe Ciais, 2006. "The timing of biological carbon sequestration and carbon abatement in the energy sector under optimal strategies against climate risks," Working Papers halshs-00009338, HAL.
    5. 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.
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    More about this item

    Keywords

    Environmental Economics and Policy;

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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