Cost-efficient carbon abatement strategies in the EU with specific focus on forest carbon sequestration

Forests can contribute to the reduction of carbon emissions by storing carbon in standing biomass or in products made of wood. Alternatively, harvested biomass can be used as bioenergy and replace fossil fuels. This thesis analyses the cost-efficiency of introducing forest carbon sequestration (FCS) into EU climate policy. Quantification of the potential and cost of FCS is important from a policy perspective, since this abatement method is being considered for inclusion in future EU climate policy. The quantification in this thesis is based on a mathematical optimisation model that aims to find the least costly combination of abatement strategies to reach a specific carbon emission target. The model covers the EU-27 member states and can be applied in static and stochastic form (paper I) or dynamic form (paper II-IV). The main research questions investigated in the four separate studies are: i) The cost-efficiency and equity of including FCS in EU climate policy to 2020; ii) whether it is worth increasing FCS at the expense of bioenergy and forest products; iii) whether renewable energy forms (wind, hydro and photovoltaics) can compete with FCS as abatement methods; and iv) what the effects of climate change in terms of increased/reduced FCS will be during the current century and the accompanying implications on the cost of EU climate policy. The results, which can be useful for policy making, demonstrate cost efficiency in using FCS as an abatement method. However, this may be at the expense of reduced equity among EU member states, since forests are distributed unequally throughout the EU. Furthermore, FCS seems to be a more cost-efficient option in terms of carbon abatement than bioenergy and, to some extent, forest products. This is also the case when comparing the cost-efficiency with that of renewables, even on modelling renewables with endogenous technological change in the form of learning-by-doing. The results provide indications of increasing FCS during the current century due to climate change, in particular in northern Europe, where warmer seasons and more precipitation are expected. This would have a positive effect on the cost of reaching the emissions target, meaning that the overall abatement cost would be reduced

Can renewable energies with learning-by-doing compete with forest sequestration to cost-effectively meet the EU carbon target for 2050?

Renewable energies have great potential to contribute to CO2 emission reductions by substituting for fossil fuels. This study examines whether renewable energies with learning-by-doing technical change can compete with forest sequestration to cost-effectively achieve the EU carbon target for 2050. Cost-effective abatement solutions are obtained from a dynamic, partial equilibrium model that accounts for three kinds of mitigation options: renewable energies and abatement in the forest and fossil fuel sectors. The results show a net present cost of reaching the target of approximately 286 billion Euros and a carbon price of 364 Euro/ton CO2 in 2050. Furthermore, the stock of renewables in 2050 can deliver twice as much as the current electricity production from renewables, which implies a contribution of 8.7% to meeting the emissions target. However, the cost per unit emissions reduction is at least fifteen-fold higher for renewables than for forest sequestration. Hence, the results indicate that renewables are unable to compete with forest sequestration unless they receive continued government support

Is forest sequestration at the expense of bioenergy and forest products cost-effective in EU climate policy to 2050?

Forest management affects the quantity of CO2 emissions in the atmosphere by carbon sequestration in standing biomass, carbon storage in forest products and production of bioenergy that replace fossil fuels. The main question in this paper is whether forest sequestration is worth increasing at the expense of bioenergy and forest products to achieve EU’s emission reduction target to 2050 cost-effectively. The assessment is based on numerical calculations using a dynamic, partial equilibrium model of cost-effective solutions, where three abatement methods in the forest sector are included together with abatement in the fossil fuel sector. The results show that forest sequestration in standing biomass is cost-effective compared to bioenergy. When sequestration is taken into account, net present costs for meeting EU carbon targets can be reduced by 18%. This is achieved through an increase in annual carbon sequestration by 30-158 million ton CO2. The overall cost of reaching the 80 per cent carbon reduction target amounts to 2,002 billion Euros when sequestration is included in the policy, but increases to 2,371 billion Euros without sequestration. Results suggest that forests can serve as a cost-efficient carbon sink over the considered time period

Nordic conference : Climate-economic and macro-economic models and their policy relevance

Den Nordiska konferensen om ekonomiska modeller och deras policyrelevans, i klimathänseende, hölls 25 maj 2016. Talare var experter och forskare från OECD, svenska universitet och nordiska institutioner samt politiker från olika partier i Sverige och Finland. Målet var att diskutera hur man bättre integrerar klimatfrågorna i ekonomisk politik, när kortsiktiga makroekonomiska modeller ämnade för finansiell analys, sällan kan ta hänsyn till klimataspekter på grund av tekniska svårigheter. Diskussionen fokuserade på möjligheter och begränsningar i olika sorters ekonomiska modeller samt på några klimatpolicy-frågor såsom handelssystem med utsläppsrätter och koldioxidskatter. Den övergripande slutsatsen var att det troligtvis är bättre att använda sig av olika sorters modeller för att analysera olika frågor och inte försöka infoga klimataspekter i kortsiktiga makroekonomiska modeller

Costs and fairness of forest carbon sequestration in EU climate policy

Large emissions of greenhouse gases are expected to cause major environmental problems in the future. European policy makers have therefore declared that they aim to implement cost-efficient and fair policies to reduce carbon emissions. The purpose of this paper is to assess whether the cost of the EU policies for 2020 can be reduced through the inclusion of carbon sequestration as and abatement option while also equity is improved. The assessment is done by numerical calculations using a chance-constrained partial equilibrium model of the EU Emissions Trading Scheme and national effort-sharing targets, where forest sequestration is introduced as an uncertain abatement option. Fairness is evaluated by calculation of Gini-coefficients for six equity criteria to policy outcomes. The estimated Gini-coefficients range between 0.11 and 0.32 for the current policy, between 0.16 and 0.66 if sequestration is included and treated as certain, and between 0.19 and 0.38 when uncertainty about sequestration is taken into account and policy-makers wish to meet targets with at least 90 percent probability. The results show that fairness is reduced when sequestration is included and that the impact is larger when sequestration is treated as certain

Med de nya svenska klimatmålen i sikte : Gapanalys samt strategier och förutsättningar för att nå etappmålen 2030 med utblick mot 2045

Under våren 2017 presenterade Naturvårdsverket scenarier för hur växthusgasutsläppen i Sverige skulle kunna utvecklas till 2035. Sedan Naturvårdsverket presenterade scenarierna har ett nytt klimatpolitiskt ramverk för Sverige beslutats av riksdagen med nya klimatmål till 2030, 2040 och 2045. Regeringen har även presenterat ett antal nya styrmedel i budgetpropositionen. Naturvårdsverket ska inom miljömålssystemet löpande och strategiskt analysera och utvärdera styrmedel och åtgärder. Naturvårdsverket har mellan maj och november 2017 gjort en första uppföljning mot de nya klimatmålen. I denna rapport presenteras hur beslutade och planerade styrmedel kan komma att falla ut givet olika antagande. En översiktlig analys av styrmedel görs också. Arbetsgruppens sammansättning har varierat över tid. Sammantaget har följande personer på Naturvårdsverket deltagit i arbetsgruppen: Tea Alopaeus (projektledare), Björn Boström, Mats Björsell, Martin Boije, Joanna Dickinson, Dag Henning, Daniel Engström Stenson, Eva Jernbäcker (projektledare till september), Julien Morel, Miriam Münnich Vass, Karl-Anders Stigzelius, Ulrika Svensson, Per Wollin. Stockholm 29 november 2017 Björn Risinger Generaldirektö