[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/foreco/v23y2016icp27-44.html
   My bibliography  Save this article

Global trade impacts of increasing Europe's bioenergy demand

Author

Listed:
  • Johnston, Craig M.T.
  • van Kooten, G. Cornelis
Abstract
European governments are rapidly turning to biomass to comply with the EU's legislated renewable energy targets for 2020 and 2030. To do so, EU member states will likely have to increase imports of biomass from timber rich regions, which will undoubtedly disrupt international wood product markets. In this study, a static global forest trade model of coniferous wood products is used to examine the effects of expanded demand for wood pellets in Europe to generate reliable electricity. Positive mathematical programming (PMP) is used to calibrate the model to 2012 bilateral trade flows. To assess the impact of increased wood-pellet demand on global forest products, we consider a scenario where EU demand for wood pellets doubles. Model results suggest increases in the world prices of industrial roundwood (1%), particleboard ($34/m3), fibreboard ($30/m3), pulp ($65/t) and pellets (71% to 128%), while the prices of sawnwood and plywood & veneer are projected to fall by $12/m3 and $4/m3, respectively. The gains and losses are unevenly distributed between timber rich and timber poor regions; Russia, Canada and the U.S. experience large net welfare gains of $706 million, $544 million and $416 million, respectively, while Asia loses $1.8 billion. In the forest products sector, the gains outweigh losses with economic benefits increasing by some $4.9 billion, but this is a cost to the consumers of electricity and/or taxpayers in the regions implementing these renewable energy policies. The price of wood pellets is projected to rise between $107 and $154 per tonne. The findings highlight the need to account for the interconnections among softwood forest products globally.

Suggested Citation

  • Johnston, Craig M.T. & van Kooten, G. Cornelis, 2016. "Global trade impacts of increasing Europe's bioenergy demand," Journal of Forest Economics, Elsevier, vol. 23(C), pages 27-44.
    • Handle: RePEc:eee:foreco:v:23:y:2016:i:c:p:27-44
    DOI: 10.1016/j.jfe.2015.11.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1104689915000525
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jfe.2015.11.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Moiseyev, Alexander & Solberg, Birger & Kallio, A. Maarit I., 2014. "The impact of subsidies and carbon pricing on the wood biomass use for energy in the EU," Energy, Elsevier, vol. 76(C), pages 161-167.
    2. Kurt Niquidet & Brad Stennes & G. C. van Kooten, 2012. "Bioenergy from Mountain Pine Beetle Timber and Forest Residuals: A Cost Analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 60(2), pages 195-210, June.
    3. van Kooten, G. Cornelis, 2015. "The Economics of Forest Carbon Sequestration Revisited: A Challenge for Emissions Offset Trading," Working Papers 202542, University of Victoria, Resource Economics and Policy.
    4. Yamamoto, Hiromi & Yamaji, Kenji & Fujino, Junichi, 2000. "Scenario analysis of bioenergy resources and CO2 emissions with a global land use and energy model," Applied Energy, Elsevier, vol. 66(4), pages 325-337, August.
    5. Craig Johnston & G. Cornelis van Kooten, 2014. "Modelling Bi-lateral Forest Product Trade Flows: Experiencing Vertical and Horizontal Chain Optimization," Working Papers 2014-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    6. Bosetti, Valentina & De Cian, Enrica & Sgobbi, Alessandra & Tavoni, Massimo, 2009. "The 2008 WITCH Model: New Model Features and Baseline," Sustainable Development Papers 55284, Fondazione Eni Enrico Mattei (FEEM).
    7. van Kooten, G. Cornelis & Johnston, Craig, 2014. "Global impacts of Russian log export restrictions and the Canada–U.S. lumber dispute: Modeling trade in logs and lumber," Forest Policy and Economics, Elsevier, vol. 39(C), pages 54-66.
    8. Johnston, Craig M.T. & van Kooten, G. Cornelis, 2015. "Economics of co-firing coal and biomass: An application to Western Canada," Energy Economics, Elsevier, vol. 48(C), pages 7-17.
    9. Kenneth Gillingham & Steven Smith & Ronald Sands, 2008. "Impact of bioenergy crops in a carbon dioxide constrained world: an application of the MiniCAM energy-agriculture and land use model," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(7), pages 675-701, August.
    10. Ince, Peter J. & Kramp, Andrew D. & Skog, Kenneth E. & Yoo, Do-il & Sample, V. Alaric, 2011. "Modeling future U.S. forest sector market and trade impacts of expansion in wood energy consumption," Journal of Forest Economics, Elsevier, vol. 17(2), pages 142-156, April.
    11. Paris, Quirino & Drogué, Sophie & Anania, Giovanni, 2011. "Calibrating spatial models of trade," Economic Modelling, Elsevier, vol. 28(6), pages 2509-2516.
    12. Brent Sohngen & Robert Mendelsohn & Roger Sedjo, 1999. "Forest Management, Conservation, and Global Timber Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 1-13.
    13. Alice Favero & Robert Mendelsohn, 2014. "Using Markets for Woody Biomass Energy to Sequester Carbon in Forests," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(1), pages 75-95.
    14. Peter J. Ince & Andrew Kramp & Kenneth E. Skog, 2012. "Evaluating Economic Impacts of Expanded Global Wood Energy Consumption with the USFPM/GFPM Model," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 60(2), pages 211-237, June.
    15. Buongiorno, Joseph & Raunikar, Ronald & Zhu, Shushuai, 2011. "Consequences of increasing bioenergy demand on wood and forests: An application of the Global Forest Products Model," Journal of Forest Economics, Elsevier, vol. 17(2), pages 214-229, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Philippidis, George & Álvarez, Rodrigo Xavier & Di Lucia, Lorenzo & Hermoso, Hugo González & Martinez, Ana González & M'barek, Robert & Moiseyev, Alexander & Panoutsou, Calliope & Itoiz, Eva Sevigne &, 2024. "The development of bio-based industry in the European Union: A prospective integrated modelling assessment," Ecological Economics, Elsevier, vol. 219(C).
    2. Zoomers, Annelies & van Noorloos, Femke & Otsuki, Kei & Steel, Griet & van Westen, Guus, 2017. "The Rush for Land in an Urbanizing World: From Land Grabbing Toward Developing Safe, Resilient, and Sustainable Cities and Landscapes," World Development, Elsevier, vol. 92(C), pages 242-252.
    3. Brinkman, Marnix L.J. & Wicke, Birka & Faaij, André P.C. & van der Hilst, Floor, 2019. "Projecting socio-economic impacts of bioenergy: Current status and limitations of ex-ante quantification methods," Renewable and Sustainable Energy Reviews, Elsevier, vol. 115(C).
    4. Miguel Riviere & Sylvain Caurla & Philippe Delacote, 2020. "Evolving Integrated Models From Narrower Economic Tools : the Example of Forest Sector Models," Post-Print hal-02512330, HAL.
    5. Mathieu, Valentin & Roda, Jean-Marc, 2023. "A meta-analysis on wood trade flow modeling concepts," Forest Policy and Economics, Elsevier, vol. 149(C).
    6. Guo, Jinggang & Gong, Peichen, 2019. "Assessing the impacts of rising fuelwood demand on Swedish forest sector: An intertemporal optimization approach," Forest Policy and Economics, Elsevier, vol. 105(C), pages 91-98.
    7. Nabuurs, Gert-Jan & Arets, Eric J.M.M. & Schelhaas, Mart-Jan, 2017. "European forests show no carbon debt, only a long parity effect," Forest Policy and Economics, Elsevier, vol. 75(C), pages 120-125.
    8. Wu, Yazhen & Deppermann, Andre & Havlík, Petr & Frank, Stefan & Ren, Ming & Zhao, Hao & Ma, Lin & Fang, Chen & Chen, Qi & Dai, Hancheng, 2023. "Global land-use and sustainability implications of enhanced bioenergy import of China," Applied Energy, Elsevier, vol. 336(C).
    9. Oh, Juhyun & Suh, Dong Hee, 2024. "Exploring the import allocation of wood pellets: Insights from price and policy influences under the renewable portfolio standard," Forest Policy and Economics, Elsevier, vol. 161(C).
    10. Johnston, Craig M.T. & Parajuli, Rajan, 2017. "What's next in the U.S.-Canada softwood lumber dispute? An economic analysis of restrictive trade policy measures," Forest Policy and Economics, Elsevier, vol. 85(P1), pages 135-146.
    11. Bryngemark, Elina, 2019. "Second generation biofuels and the competition for forest raw materials: A partial equilibrium analysis of Sweden," Forest Policy and Economics, Elsevier, vol. 109(C).
    12. Jonsson, Ragnar & Rinaldi, Francesca & Pilli, Roberto & Fiorese, Giulia & Hurmekoski, Elias & Cazzaniga, Noemi & Robert, Nicolas & Camia, Andrea, 2021. "Boosting the EU forest-based bioeconomy: Market, climate, and employment impacts," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    13. Shayegh, Soheil & Sanchez, Daniel L. & Caldeira, Ken, 2017. "Evaluating relative benefits of different types of R&D for clean energy technologies," Energy Policy, Elsevier, vol. 107(C), pages 532-538.
    14. G. Cornelis van Kooten, 2020. "Climate Change and Agriculture," Working Papers 2020-01, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    15. Miguel Riviere & Sylvain Caurla, 2020. "Representations of the Forest Sector in Economic Models [Les représentations du secteur forestier dans les modèles économiques]," Post-Print hal-03088084, HAL.
    16. Lauri, Pekka & Forsell, Nicklas & Korosuo, Anu & Havlík, Petr & Obersteiner, Michael & Nordin, Annika, 2017. "Impact of the 2°C target on global woody biomass use," Forest Policy and Economics, Elsevier, vol. 83(C), pages 121-130.
    17. Lotte Visser & Ric Hoefnagels & Martin Junginger, 2020. "The Potential Contribution of Imported Biomass to Renewable Energy Targets in the EU–the Trade-off between Ambitious Greenhouse Gas Emission Reduction Targets and Cost Thresholds," Energies, MDPI, vol. 13(7), pages 1-30, April.
    18. Karner, K. & Dißauer, C. & Enigl, M. & Strasser, C. & Schmid, E., 2017. "Environmental trade-offs between residential oil-fired and wood pellet heating systems: Forecast scenarios for Austria until 2030," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 868-879.
    19. Miguel RIVIERE & Sylvain CAURLA, 2018. "Integrating non-timber objectives into bio-economic models of the forest sector: a review of recent innovations and current shortcomings," Working Papers of BETA 2018-26, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    20. Fanny Groundstroem & Sirkku Juhola, 2021. "Using systems thinking and causal loop diagrams to identify cascading climate change impacts on bioenergy supply systems," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 26(7), pages 1-48, October.
    21. Bayramov, Vugar & Abbas, Gulnara, 2017. "Oil shock in the Caspian Basin: Diversification policy and subsidized economies," Resources Policy, Elsevier, vol. 54(C), pages 149-156.
    22. Brown, Terrence E. & Boon, Edward & Pitt, Leyland F., 2017. "Seeking funding in order to sell: Crowdfunding as a marketing tool," Business Horizons, Elsevier, vol. 60(2), pages 189-195.
    23. Johnston, Craig M.T. & van Kooten, G. Cornelis, 2017. "Impact of inefficient quota allocation under the Canada-U.S. softwood lumber dispute: A calibrated mixed complementarity approach," Forest Policy and Economics, Elsevier, vol. 74(C), pages 71-80.
    24. G. Cornelis van Kooten, 2016. "California Dreaming: The Economics of Renewable Energy," Working Papers 2016-05, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alice Favero & Robert Mendelsohn, 2013. "Evaluating the Global Role of Woody Biomass as a Mitigation Strategy," Working Papers 2013.37, Fondazione Eni Enrico Mattei.
    2. Johnston, Craig M.T. & Cornelis van Kooten, G., 2015. "Back to the past: Burning wood to save the globe," Ecological Economics, Elsevier, vol. 120(C), pages 185-193.
    3. Favero, Alice & Mendelsohn, Robert & Sohngen, Brent, 2016. "Carbon Storage and Bioenergy: Using Forests for Climate Mitigation," MITP: Mitigation, Innovation and Transformation Pathways 232215, Fondazione Eni Enrico Mattei (FEEM).
    4. Daigneault, Adam & Johnston, Craig & Korosuo, Anu & Baker, Justin S. & Forsell, Nicklas & Prestemon, Jeffrey P. & Abt, Robert C., 2019. "Developing Detailed Shared Socioeconomic Pathway (SSP) Narratives for the Global Forest Sector," Journal of Forest Economics, now publishers, vol. 34(1-2), pages 7-45, August.
    5. Miguel RIVIERE & Sylvain CAURLA, 2018. "Integrating non-timber objectives into bio-economic models of the forest sector: a review of recent innovations and current shortcomings," Working Papers of BETA 2018-26, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    6. Johnston, Craig M.T. & Parajuli, Rajan, 2017. "What's next in the U.S.-Canada softwood lumber dispute? An economic analysis of restrictive trade policy measures," Forest Policy and Economics, Elsevier, vol. 85(P1), pages 135-146.
    7. Kim, Sei Jin & Baker, Justin S. & Sohngen, Brent L. & Shell, Michael, 2018. "Cumulative global forest carbon implications of regional bioenergy expansion policies," Resource and Energy Economics, Elsevier, vol. 53(C), pages 198-219.
    8. Miguel Riviere & Sylvain Caurla, 2020. "Representations of the Forest Sector in Economic Models [Les représentations du secteur forestier dans les modèles économiques]," Post-Print hal-03088084, HAL.
    9. Johnston, Craig M.T. & van Kooten, G. Cornelis, 2017. "Impact of inefficient quota allocation under the Canada-U.S. softwood lumber dispute: A calibrated mixed complementarity approach," Forest Policy and Economics, Elsevier, vol. 74(C), pages 71-80.
    10. G. Cornelis van Kooten, 2016. "California Dreaming: The Economics of Renewable Energy," Working Papers 2016-05, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    11. Latta, Gregory S. & Sjølie, Hanne K. & Solberg, Birger, 2013. "A review of recent developments and applications of partial equilibrium models of the forest sector," Journal of Forest Economics, Elsevier, vol. 19(4), pages 350-360.
    12. Miguel Riviere & Sylvain Caurla & Philippe Delacote, 2020. "Evolving Integrated Models From Narrower Economic Tools : the Example of Forest Sector Models," Post-Print hal-02512330, HAL.
    13. Baker, J.S. & Wade, C.M. & Sohngen, B.L. & Ohrel, S. & Fawcett, A.A., 2019. "Potential complementarity between forest carbon sequestration incentives and biomass energy expansion," Energy Policy, Elsevier, vol. 126(C), pages 391-401.
    14. Hurmekoski, Elias & Hetemäki, Lauri, 2013. "Studying the future of the forest sector: Review and implications for long-term outlook studies," Forest Policy and Economics, Elsevier, vol. 34(C), pages 17-29.
    15. Keller, Victor & Lyseng, Benjamin & English, Jeffrey & Niet, Taco & Palmer-Wilson, Kevin & Moazzen, Iman & Robertson, Bryson & Wild, Peter & Rowe, Andrew, 2018. "Coal-to-biomass retrofit in Alberta –value of forest residue bioenergy in the electricity system," Renewable Energy, Elsevier, vol. 125(C), pages 373-383.
    16. Emily Hope & Bruno Gagnon & Vanja Avdić, 2020. "Assessment of the Impact of Climate Change Policies on the Market for Forest Industrial Residues," Sustainability, MDPI, vol. 12(5), pages 1-20, February.
    17. Pan, Wenqi & Chang, Wei-Yew & Wu, Ting & Zhang, Han & Ning, Zhuo & Yang, Hongqiang, 2021. "Impacts of the China-US trade restrictions on the global forest sector: A bilateral trade flow analysis," Forest Policy and Economics, Elsevier, vol. 123(C).
    18. Caurla, Sylvain & Bertrand, Vincent & Delacote, Philippe & Le Cadre, Elodie, 2018. "Heat or power: How to increase the use of energy wood at the lowest cost?," Energy Economics, Elsevier, vol. 75(C), pages 85-103.
    19. Johnston, Craig M.T. & Kooten, G. Cornelis van, 2014. "Carbon Neutrality of Hardwood and Softwood Biomass: Issues of Temporal Preference," Working Papers 190592, University of Victoria, Resource Economics and Policy.
    20. Wang, S. & An, H. & Chang, W.-Y. & Gaston, C., 2018. "The economic effect of genomic technology on the forestry industry," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277443, International Association of Agricultural Economists.

    More about this item

    Keywords

    Bioenergy; Wood pellets; Forestry; Vertical and horizontal markets;
    All these keywords.

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:foreco:v:23:y:2016:i:c:p:27-44. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/701775/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.