Anders Lunnan

Policy And Economic Aspects Of Forest Energy Utilisation

Bioenergy projects must be economically viable for the different actors in the value chain. Forest biomass used for energy purposes must be able to compete with other uses of the biomass, and at the same time the energy produced from biomass must be as cheap as or cheaper than energy produced from competing energy systems. The costs in these calculations are changing all the time; in particular the cost of fossil fuels shows large variations. As the risk is high and the economic margins in many cases are low, there is a tendency that investors are reluctant to invest in bioenergy projects. On the other hand, prices of wood based fuels have been rising modestly compared with e.g. oil and gas, which reduces the economic risk when investing in a

Policies Affecting Forestry Entrepreneurship

Many demand and supply-side policies impede or foster forestry entrepreneurship. A study was conducted to consolidate existing knowledge on policies influencing forestry entrepreneurship in Finland, Norway, Japan, Australia, the Philippines and the USA, and to draw conclusions on these impeding and fostering factors. From the country studies it was difficult to find common structures on policies affecting forestry entrepreneurship. This is understandable because most policies in forestry are aimed at supporting sustainable forest management, wood production and ecological services of the forests rather than entrepreneurship as such. Despite the high variety of policies applied in the study countries, it can be concluded that strict public control on forests’ use and management potentially impedes forestry entrepreneurship. While these policies assist to correct market failure and to promote sustainability of forest management, they may also result into unnecessary and ineffective regulations that limit the opportunities for forestry entrepreneurship. A common feature promoting the demand for forestry entrepreneurship in some of the countries studied is the strong emphasis on forestry cooperatives, which were important institutions to support small-scale forestry entrepreneurship. In many study countries, different ad hoc programs are implemented to find new economic and entrepreneurial opportunities aside from the current use of wood and forests. Subsidies and tax incentives are commonly applied to reduce risks from making forestry investments or otherwise increase the economic return from timber production.