JEL classification: O13 Q21 Q23 L73Keywords: Forest sector model Biomass Wood supply IPCC scenarios a b s t r a c t This study addresses the effects of increasing energy wood prices on the EU forest sector and on the use of wood biomass for energy. We examine different energy wood price levels under two contrasting scenarios of future global development, defined by the A1 and B2 storylines of IPCC. A1 depicts increased globalization and rapid economic growth. In B2, the economic growth is more modest, and the world is more environmentally conscious and regionally oriented. The analysis carried out using the global forest sector model EFI-GTM shows that as energy wood prices increase, the wood imports and reallocation of wood from competing industrial users such as board manufacturers or the pulp and paper industry also increase strongly. The quantity of wood directed from the forest industry to the energy sector would at most be around 20 Mtoe (million tons of oil equivalent) in terms of energy, given a price of 100 D /m 3 of energy wood. Still, this would cover only around 8% of the European Union's RES target for 2020, and an even lower share for 2030. For some forest industry sectors like production of pulp and panels that would mean an important output reduction, around 20-25%. Additional felling could be an important source of wood for bioenergy in the near future, when utilization of the forest resource potential is still not very high. However, toward 2030, forest resource utilization is projected to increase and might become a limiting factor for additional biomass potentials. Given the relatively high economic growth assumed in the scenarios and * Corresponding author. Tel.: +358 10 773 4328.E-mail address: moiseyev@efi.int (A. Moiseyev).A. Moiseyev et al. / Journal of Forest Economics 17 (2011) 197-213 the rather strong development in the demand for forest industry products, there is a considerable chance that the supply of wood biomass for energy will be largely limited to logging residues in the long run.
Using wood as a building material affects the carbon balance through several mechanisms. This paper describes a modelling approach that integrates a wood product substitution model, a global partial equilibrium model, a regional forest model and a stand-level model. Three different scenarios were compared with a businessas-usual scenario over a 23-year period (2008-2030). Two scenarios assumed an additional one million apartment flats per year will be built of wood instead of non-wood materials by 2030. These scenarios had little effect on markets and forest management and reduced annual carbon emissions by 0.2-0.5% of the total 1990 European GHG emissions. However, the scenarios are associated with high specific CO 2 emission reductions per unit of wood used. The third scenario, an extreme assumption that all European countries will consume 1-m 3 sawn wood per capita by 2030, had large effects on carbon emission, volumes and trade flows. The price changes of this scenario, however, also affected forest management in ways that greatly deviated from the partial equilibrium model projections. Our results suggest that increased wood construction will have a minor impact on forest management and forest carbon stocks. To analyse larger perturbations on the demand side, a market equilibrium model seems crucial. However, for that analytical system to work properly, the market and forest regional models must be better synchronized than here, in particular regarding assumptions on timber supply behaviour. Also, bioenergy as a commodity in market and forest models needs to be considered to study new market developments; those modules are currently missing.
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