Paying for forest carbon or stimulating fuelwood demand? Insights from the French Forest Sector Model

Abstract

As European countries move towards steeper cuts in greenhouse gases emissions, questions are mounting, in the forest sector, about the best balance between policies that favor carbon sequestration in biomass, and policies that favor fossil-fuel substitution, with potentially conflicting implications for forest management. We provide insights on this debate by comparing the environmental and economic implications for the French forest sector of a "stock" policy (payment for sequestration in situ), a "substitution" policy (subsidy to fuelwood consumption), and a combination thereof - all calibrated on the same price of carbon. To do so, we use the French Forest Sector Model (FFSM), which combines a dynamic model of French timber resource and a dynamic partial-equilibrium model of the French forest sector. Simulations over the 2010-2020 period show that the stock policy is the only one that performs better than business-as-usual in terms of carbon. In the substitution policy, cumulative substitution benefits are not sufficient to offset carbon losses in standing forests over this biologically short, but politically relevant period of time. And the combination policy does not perform better. However, the stock policy has negative impacts on consumers welfare, its costs are increasing over time as carbon is accumulated, and it raises political economy questions about the negotiability of the reference against which excess carbon is measured

Economics of forest carbon storage and the additionality principle

“…The payment leads to a small decrease in aggregate harvest level, but causes a sufficiently large increase in timber price so that the profit becomes larger. Similar results have been reported in Lecocq et al (2011) and Caurla et al (2013). The non-timber benefits increase with carbon price as well.…”

Quantifying the impact of forest management on the carbon balance of the forest-wood product chain: A case study applied to even-aged oak stands in France

“…The question thus arises as to whether or not it is preferable to maximize energy wood production on the short term. For the whole French forest sector, there is no evidence that an energy substitution policy would lead to a better carbon balance at the national level in the next decade (Lecocq et al, 2011). Increasing both the production of long-lived HWPs and their average lifetimes Fig.…”

A multi-sector intertemporal optimization approach to assess the GHG implications of U.S. forest and agricultural biomass electricity expansion

“…Recent work has focused either regionally on Europe (Moiseyev et al, 2011;Lauri et al, 2012), or nationally on Norway (Bolkesjø et al, 2006;Sjølie et al, 2010;Trømborg and Solberg, 2010), Finland , and France (Lecocq et al, 2011). In Norway, Bolkesjø et al, (2006) used the Norwegian Trade Model II (NTM II) to evaluate the biopower impacts of varying future energy price scenarios on not only forest industrial biopower production and consumption, but also on the changes in wood stove and district heating use.…”