Should forests be used as uncertain carbon sinks or uncertain fossil fuel substitutes in the EU Roadmap to 2050?
This study investigates the contribution of forest carbon sequestration to a cost-efficient EU climate policy from 2010 to 2050 under conditions of uncertainty. We note that there is a trade-off between sequestration and alternative uses of forests such as bioenergy and timber production. A dynamic and probabilistic cost-minimization model is developed, which includes fossil fuel use within the EU Emissions Trading System and forest management in the EU-27 countries. The results suggest that if policy makers wish to meet emissions targets with 80% certainty, this goal will be eight times more expensive than when they were unconcerned with uncertainty. Policy makers’ risk attitudes affect forest management strategy primarily through the inclusion of wood products, where potential carbon emissions reductions are high but also highly uncertain. Excluding wood products from a climate strategy can be expensive if policy maker are insensitive to uncertainty.
|Date of creation:||12 Sep 2013|
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Working Paper Series
rwp00-001, Harvard University, John F. Kennedy School of Government.
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- 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.
- Schlegel Stephanie & Kaphengst Timo, 2007. "European Union Policy on Bioenergy and the Role of Sustainability Criteria and Certification Systems," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-19, December.
- Robert N. Stavins, 1999. "The Costs of Carbon Sequestration: A Revealed-Preference Approach," American Economic Review, American Economic Association, vol. 89(4), pages 994-1009, September.
- Gren, Ing-Marie & Carlsson, Mattias & Elofsson, Katarina & Munnich, Miriam, 2012. "Stochastic carbon sinks for combating carbon dioxide emissions in the EU," Energy Economics, Elsevier, vol. 34(5), pages 1523-1531.
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