Damned if you do, damned if you do not—Reduced Climate Impact vs. Sustainable Forests in Sweden

Geijer, Erik; Bostedt, Göran; Brännlund, R.

Damned if you do, damned if you do not—Reduced Climate Impact vs. Sustainable Forests in Sweden

2011

Geijer, Erik | Bostedt, Göran | Brännlund, R. (Runar)

The main objective of this paper is to analyze the potential goal conflict between two of Sweden's environmental objectives: Sustainable Forests and Reduced Climate Impact – or, more precisely, the conflict between forest conservation and the supply of wood fuel. To accomplish this, we use a forest sector model that includes the suppliers and major users of roundwood. The econometric results, based on a data set that spans 40 years, show that all the own price elasticities have the expected signs. Among the three forestry products, the supply and (long-term) demand of forest fuel seems to be most sensitive to a price change. In a second step, the estimated model is used to simulate the effect of increased forest conservation – the Sustainable Forest objective – on the supply of wood fuel. If oil is used as a substitute, Swedish emissions of greenhouse gases will increase by almost 0.92 percent, which indicates a clear conflict with the Reduced Climate Impact objective.

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