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Costs and fairness of forest carbon sequestration in EU climate policy

Author

Listed:
  • Munnich Vass, Miriam

    () (Department of Economics, Swedish University of Agricultural Sciences)

  • Elofsson, Katarina

    (Department of Economics, Swedish University of Agricultural Sciences)

  • Gren, Ing-Marie

    (Department of Economics, Swedish University of Agricultural Sciences)

Abstract

Large emissions of greenhouse gases are expected to cause major environmental problems in the future. European policy makers have therefore declared that they aim to implement cost-efficient and fair policies to reduce carbon emissions. The purpose of this paper is to assess whether the cost of the EU policies for 2020 can be reduced through the inclusion of carbon sequestration as and abatement option while also equity is improved. The assessment is done by numerical calculations using a chance-constrained partial equilibrium model of the EU Emissions Trading Scheme and national effort-sharing targets, where forest sequestration is introduced as an uncertain abatement option. Fairness is evaluated by calculation of Gini-coefficients for six equity criteria to policy outcomes. The estimated Gini-coefficients range between 0.11 and 0.32 for the current policy, between 0.16 and 0.66 if sequestration is included and treated as certain, and between 0.19 and 0.38 when uncertainty about sequestration is taken into account and policy-makers wish to meet targets with at least 90 percent probability. The results show that fairness is reduced when sequestration is included and that the impact is larger when sequestration is treated as certain.

Suggested Citation

  • Munnich Vass, Miriam & Elofsson, Katarina & Gren, Ing-Marie, 2013. "Costs and fairness of forest carbon sequestration in EU climate policy," Working Paper Series 2013:5, Swedish University of Agricultural Sciences, Department Economics.
  • Handle: RePEc:hhs:slueko:2013_005
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    File URL: http://pub.epsilon.slu.se/10334/
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    References listed on IDEAS

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    More about this item

    Keywords

    carbon sequestration; costs; fairness; EU climate policy;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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