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Improving Land-use Modelling within CGE to Assess Forest-based Mitigation Potential and Costs

Author

Listed:
  • Melania Michetti

    (Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC), Fondazione Eni Enrico Mattei (FEEM), Università Cattolica del Sacro Cuore di Milano)

  • Ramiro Parrado

    (Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC), Fondazione Eni Enrico Mattei (FEEM), Università Ca’ Foscari di Venezia)

Abstract
We present a computable general equilibrium model properly modified to analyse the potential role of the European forestry sector within climate mitigation. Improvements on database and modelling frameworks allow accounting for land heterogeneity across and within regions and for land transfers between agriculture, grazing, and forestry. The forestry sector has been modified to track carbon mitigation potential from both intensive and extensive forest margins, which have been calibrated according to a forest sectoral model. Two sets of climate policies are simulated. In a first scenario, Europe is assumed to commit unilaterally to reduce CO2 emissions by 20% and 30%, by 2020. In a second scenario, in addition to the emissions quotas, progressively higher forest sequestration subsidies are paid to European firms to foster the implementation of forestry practices. Results show that including forest carbon in the compliance strategy decreases European policy costs and carbon price, while it does not lead to significant reductions in carbon leakage. We conclude that while European forests can reinforce other mitigation measures, their contribution as a stand-alone abatement strategy results insufficient to comply with emissions reduction targets. Additionally, carbon sinks provided by European temperate forests do not offer considerable mitigation potential if compared with other forest biomes around the world. A much higher forest mitigation would require other regions to take part in a climate stabilization agreement, especially those where old-growth forests exist.

Suggested Citation

  • Melania Michetti & Ramiro Parrado, 2012. "Improving Land-use Modelling within CGE to Assess Forest-based Mitigation Potential and Costs," Working Papers 2012.19, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2012.19
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    Cited by:

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    2. Bosello, Francesco & Marangoni, Giacomo & Orecchia, Carlo & Raitzer, David A. & Tavoni, Massimo, 2016. "The Cost of Climate Stabilization in Southeast Asia, a Joint Assessment with Dynamic Optimization and CGE Models," MITP: Mitigation, Innovation and Transformation Pathways 251810, Fondazione Eni Enrico Mattei (FEEM).
    3. Bosello, Francesco & Orecchia, Carlo & Parrado, Ramiro, 2013. "The additional contribution of non-CO2 mitigation in climate policy costs and efforts in Europe," Conference papers 332363, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Melania Michetti & Matteo Zampieri, 2014. "Climate–Human–Land Interactions: A Review of Major Modelling Approaches," Land, MDPI, vol. 3(3), pages 1-41, July.

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    More about this item

    Keywords

    Climate Change; Climate Mitigation; General Equilibrium Modelling; Forestry;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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