Alice Favero

Using Markets for Woody Biomass Energy to Sequester Carbon in Forests

Although storing more carbon in forests should be part of an efficient mitigation program, it is unclear how to create effective incentives to make this happen. The literature largely has focused on giving landowners direct incentives to store carbon. This paper explores an alternative mechanism to increase forest carbon sequestration by creating a market for wood bioenergy. By raising the value of wood, the program encourages landowners to convert vast amounts of land to forest, which incidentally increases forest carbon. By providing an indirect subsidy on woody biomass, governments can give even more incentive to reward this carbon sequestration.

Evaluating the Global Role of Woody Biomass as a Mitigation Strategy

As policy makers consider stringent targets for greenhouse gas emissions, integrated assessment models are increasingly relying on biomass energy as a critical energy source. However, it is not clear how much woody biomass to expect across time and across the planet. The integrated assessment models simply do not have enough detail about global forests and arable land to make careful forecasts of biomass supply over time. Integrating the complex dynamic demand for bioenergy from the IAMs with the complex dynamic structure of forests and forest supply is a daunting intertemporal task. This study examines the market for woody biomass by combining the integrated assessment model WITCH with the global dynamic forestry model GTM. Three carbon tax schedules are used to simulate different mitigation policies that lead to radiative forcing levels of 3.7, 3.2 and 2.5 W/m2 and a baseline scenario with no mitigation policies. WITCH determines the demand for woody biomass and GTM determines the supply of woody biomass over time. Moving from a mild to stringent mitigation policy would increase the demand of woody biomass from 8.2 to 15.2 billion m3/yr while the international price of wood would increase 4 to 9 times relative to the baseline scenario by 2100. This would shrink the demand for industrial wood products from 80% to 90% with the biomass program. Forest area will expand by 70-95% leading to increased storage of 685-1,279 GtCO2 in forest by 2100. Overall, the biomass program with the CCS technology plays a key contribution to overall GHG emission reductions in all scenarios contributing 20-27% of all mitigation for 2020-2100.

Using forests for climate mitigation: sequester carbon or produce woody biomass?

Forests can mitigate greenhouse gases by storing carbon (SEQU) and supplying woody biomass for burning in power plants with CCS (WBCCS). The paper uses GTM to understand the global dynamics of forests and WITCH to determine the most cost-effective mitigation methods to limit long-term radiative forcing. The analysis finds that both SEQU and WBCCS are effective but the most effective choice is to use them together. WBCCSxa0+xa0SEQU accounts for 23–28% of all mitigation. SEQU initially dominates while carbon prices are low while WBCCS becomes more important later with especially high carbon prices. Forest mitigation encourages land use to shift towards forests, increasing natural forests and especially managed forests. SEQU leads to larger trees and more natural forestland and WBCCS leads to faster growing trees and more managed stands.

Fairness, Credibility and Effectiveness in the Copenhagen Accord: An Economic Assessment

State-of-the-art literature on climate change policies has proposed numerous approaches for the Post-Kyoto agreement. However, in analysing the outcome of negotiations, the feeling is that a huge gap exists between policy makers and scientists. This paper tries to bridge this gap by providing a critical and comparative analysis of the Copenhagen Accord provisions, linking them to a part of the climate-economy literature. It assesses Copenhagen outcome in terms of economic efficiency, environmental effectiveness and political credibility. Our conclusion suggests that the Copenhagen Accord succeeded in considering some of the climate policy principles, namely credibility, equity and fairness. First, the change in political leadership indicates a more collaborative mood. Regarding equity and fairness, developing countries obtained an explicit commitment by developed countries for technology, but especially financial transfers, though on a conditional basis. The major limitation of the Accord is the way it addresses the trade-off between politically viability, thus implicitly fairness, and economic and environmental effectiveness. Therefore, future negotiations should deal with the eventuality of a global temperature increase above the 2 degrees, even in the presence of successful global mitigation.

Investments and Financial Flows Induced by Climate Mitigation Policies

In this paper we use the hybrid integrated model WITCH to quantify and analyze the investments and financial flows stimulated by a climate policy to stabilize Greenhouse Gases concentrations at 550ppm CO2-eq at the end of the century. We focus on investments to decarbonize the power sector and on investments in knowledge creation. We examine the financial flows associated with the carbon market and the implications for the international trade of oil. Criticalities in investment requirements will emerge when coal power plants with carbon capture and sequestration and nuclear power plants are deployed around 2020-2040, both in high and low income regions. Investments in energy related R&D increase sharply and might cause stress in the short term. However, the transition to a low-carbon world, although costly, appears to be manageable from a financial point of view. In particular, R&D financial needs can easily be accommodated using revenues from the carbon market, which is expected to eventually become more important than the oil market in terms of traded value.

Can the Global Forest Sector Survive 11°C Warming?

Although most global forest economic studies have found that warming is likely to increase forest supply, these studies have examined only the limited warming expected through 2100. This study extends the analysis out to 2250 to test much higher levels of warming to examine very long term effects. Future warming is predicted to steadily increase forest productivity, with global timber supply predicted to increase through 2250, even with warming up to 11 °C warming. However, natural forestland and biomass will shrink. This result suggests far future forests will not be able to hold the same stock of carbon they hold today.

An Economic Assessment of Low-Carbon Investment Flows in the U.S. Power Sector

This study used the GT NEMS model to analyze how the proposed federal regulation on carbon emissions will impact investments in the U.S. electricity generating capacity at the federal and Census Division level for 2016-2030. Results show that in order to reduce emissions by 32% by 2030, cumulative investments will increase from 399 to 414 billion USD by 2030. Under the scenario which addresses carbon leakage - covering new and existing power plants - cumulative investment will reach 475 billion USD by 2030. Addressing carbon leakage will affect not only the size of the investments but also the direction: when only existing power plants are covered investments in natural gas remains almost unchanged (123 billion USD) relative to the Reference case; while under the scenario that covers all power plants, investment in natural gas will be 24% lower and the investments in renewable will be 64% higher than the Reference. Carbon regulation will produce not only losers and winners among energy sources but also among U.S. states. While the South and Midwest states will experience much higher increase in cumulative investments with respect to the national average; Northeast and West states will reduce their overall investments by 2030 under the policy scenarios.

Carbon Storage and Bioenergy: Using Forests for Climate Mitigation

The carbon mitigation literature has separately considered using forests to store carbon and as a source of bioenergy. In this paper, we look at both options to reach a 2°C mitigation target. This paper combines the global forest model, GTM, with the IAM WITCH model to study the optimal use of forestland to reach an aggressive global mitigation target. The analysis confirms that using both options is preferable to using either one alone. At first, while carbon prices are low, forest carbon storage dominates. However, when carbon prices pass

Can the Global Forest Sector Survive 111C Warming

235/tCO2, wood bioenergy with CCS becomes increasingly important as a mechanism to remove CO2 from the atmosphere. The use of both mechanisms increases global forestland at the expense of marginal cropland. While the storage program dominates, natural forestland expands. But when the wood bioenergy program starts, natural forestland shrinks as more forests become managed for higher yields.

Strategies and Research Towards LCS in Italy

It is well known that the forestry sector is sensitive to climate change but most studies have examined impacts only through 2100 and warming of less than 4°C. This is the first timber analysis to consider possible climate change impacts out to 2250 and warming up to 11°C above 1900 levels. The results suggest that large productivity gains through 2190 lead to a continued expansion of the global timber supply. However, as carbon fertilization effects diminish and continued warming causes forestland to continue to shrink, warming above 8°C is predicted to become harmful to the forest sector.