Carbon Neutrality and Bioenergy: A Zero-Sum Game?

Biomass, a renewable energy source, has been viewed as “carbon neutral”—that is, its use as energy is presumed not to release net carbon dioxide. However, this assumption of carbon neutrality has recently been challenged. In 2010 two letters were sent to the Congress by eminent scientists examining the merits—or demerits—of biomass for climate change mitigation. The first, from about 90 scientists (to Nancy Pelosi and Harry Reid, from W.H. Schlesinger et al. May 17, 2010), questioned the treatment of all biomass energy as carbon neutral, arguing that it could undermine legislative emissions reduction goals. The second letter, submitted by more than 100 forest scientists (to Barbara Boxer et al. from Bruce Lippke et al. July 20, 2010), expressed concern over equating biogenic carbon emissions with fossil fuel emissions, as is contemplated in the Environmental Protection Agency’s Tailoring Rule. It argued that an approach focused on smokestack emissions, independent of the feedstocks, would encourage further fossil fuel energy production, to the long-term detriment of the atmosphere. This paper attempts to clarify and, to the extent possible, resolve these differences.carbon neutrality, biomass, wood biomass, bioenergy, carbon dioxide, feedstock, energy, alternative fuel, rational expectations

Carbon Credits for Avoided Deforestation

Several important issues need to be addressed to make avoided deforestation (AD) a feasible option for climate change policy. Traditional questions associated with land-based sequestration options have largely been discussed in terms of project-based approaches to carbon sequestration. For country-level commitments these concepts remain important, but we argue in this paper that they can and should be addressed differently. In order to address AD, it is useful to begin by outlining the international climate control regimes under which AD could be included as an option. Two general alternatives are discussed - an arrangement that is a linear extension of the current Kyoto Protocol but that involves more countries with specific emission reduction targets, and an alternative expanded arrangement that requires that essentially all countries have greenhouse gas emission targets. We consider how AD would fit into these two general types of international agreements and address questions related to baselines, additionality, permanence, and leakage. We conclude that the key issues related to including deforestation in either of these arrangements revolve around measuring, monitoring (e.g., additionality), and the development of efficient incentives by countries to alter their land-use regimes.avoided deforestation, carbon, sequestration, credits, climate, warming

Toward Globalization of the Forest Products Industry: Some Trends

This paper examines the hypothesis that changes have been brought about in the forest industry that allow it to participate fully in globalization. The forest industry has undergone profound changes in recent years in large part by new technologies. Whereas traditionally it was primarily an extractive industry that relied on local sources for its basic resource—raw, industrial wood—today, intensively managed planted forests are replacing natural forests as the basic source of the wood resource, and modern biotechnology is being applied to create trees that both grow rapidly and have traits desired in industrial wood. These changes eliminate the traditional ties between forest processing and locations with abundant natural forests. Today, globalization allows investments, capital flows, and emerging technologies to move easily into regions where they are expected to be particularly productive. It also provides for the ready utilization of the human resources of foreign countries. Thus, offshore outsourcing is closely associated with globalization. The easy flow of productive factors results in the production of goods and services based on a mix of in-country and external contributions to production. In forestry, this process takes on an additional dimension in which the basic resource itself, the forest, can be relocated to capitalize on the cost advantages of particular regions. Additional changes have been driven by modern biotechnology, which has dramatically increased the variety of areas where productive forests can be grown, as well as overall forest productivity. We find that there is substantial evidence in this country-level forestry data to support our hypotheses of how globalization has begun to reshape the forest products industry. However, the evidence suggests that the changes have been more prominent in the pulp industry than in the structural wood sector.forests, globalization, forest products, international, comparative advantage, technology

A GLOBAL MODEL OF CLIMATE CHANGE IMPACTS ON TIMBER MARKETS

Several papers have now estimated the impact of climate change on national timber markets, but few studies have measured impacts globally. Further, the literature on impacts has focused heavily on changes in productivity and has not integrated movements of biomes as well. Here, a dynamic model of ecological change and economic change is developed to capture the impact of climate change on world timber markets. Climate change is predicted to increase global timber production as producers in low-mid latitude forests react quickly with more productive short-rotation plantations, driving down timber prices. Producers in mid-high latitude forests, in contrast, are likely to be hurt by the lower prices, dieback, and slower productivity increases because of long-rotation species. Consumers in all regions benefit from the lower prices, and the overall impacts of climate change in timber markets are expected to be beneficial, increasing welfare in those markets from 2% to 8%.Resource /Energy Economics and Policy,

Exchange Rates and the Competitiveness of the US Timber Sector in a Global Economy

This paper examines the competitiveness of the US timber industry under different exchange rate policies using a dynamic optimization model of global timber markets. We assume that exchange rates affect the cost structure of harvesting and managing forests and simulate the model for baseline conditions and four additional exchange rate policies. Two policies consider a strengthening United States dollar scenario and two policies examine weak South American currencies. Recently South America has increased its share of global timber production and is shipping increasing quantities of timber to the Unites States. The results indicate that US competitiveness in the forestry sector is sensitive both to strong US $policies and to the weak currency policies pursued by South American governments. A 20$ compared to all other currencies can reduce harvests by 4 7% in the United States over the next 50 years, while a similar reduction in currency values in South America can reduce U.S. production by around 0.4%. In dollar terms, each additional cubic meter of wood produced in South America due to currency policies can reduce producer surplus in the United States by $100.International Relations/Trade,

The Impact of Globalization on the Forest Products Industry

In this paper we examine the hypothesis that changes occurring in the forest industry allow its full participation in globalization. The forest industry has undergone profound changes in recent years, largely because of new technologies. These changes have been directly observed by the researchers in the field in the form of intensively managed plantation forests; in laboratories where new techniques are being used to improve tree seeds; and in tree nurseries where the improved seeds are prepared for mass plantings. Traditionally, forestry was primarily an extractive industry that relied on local sources for its basic resource: raw, industrial wood. Today, however, intensively managed planted forests are replacing natural forests as the basic source of the wood resource and modern biotechnology is being applied to create trees that grow rapidly and have traits desired in industrial wood. These changes eliminate the traditional ties between forest product processing and locations with abundant natural forests

Will Developing Countries be the Early Adopters of Genetically Engineered Forests?

Although anticipation of a biotechnology revolution has led to expectations of high rates of adoption and substantial financial returns, one area that has been slow to develop is that of tree biotechnology, particularly genetically engineered (GE) trees designed for the production of wood for industrial purposes (e.g., lumber and paper). Although the costs associated with transgenic trees are substantial, GE trees have the potential to provide substantial financial and economic returns under a variety of conditions. This paper examines the likely relative costs and returns in industrial and developing countries related to the introduction of GE trees. It suggests that certain developing countries have attributes that may impart a comparative advantage in investments in adopting and planting transgenic trees.Includes bibliographical reference

Biotech and Planted Trees : Some Economic and Regulatory Issues

In recent years, the application of biotechnology to agriculture has resulted in a host of changes and innovations. Transgenic(genetically modified) crops are now common in much of North American agriculture. Transgenic forestry is not yet at that level of commercial application. However, there are numerous biotechnological innovations under development in forestry, many of them adapted from agriculture. This paper provides an introduction and background into transgenic trees and forestry. It then discusses some aspects of the economic potential and the regulatory system related to transgenic trees.Includes bibliographical reference