Afforestation and Timber Management Compliance Strategies in Climate Policy. A Computable General Equilibrium Analysis

Melania Michetti and Renato Nunes Rosa

No 332170, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper analyzes the role of afforestation-reforestation and timber management activities, and their major and secondary economic effects in stabilizing climate during the first commitment period of the Kyoto Protocol. In particular, with a Computable General Equilibrium framework, the ICES model, it is inferred how forest carbon sequestration fits within the European domestic portfolio of a 2020-20 and 2020-30 climate stabilization policy. Afforestation and land use are accounted for by introducing their effects in the model. This is done by relying on carbon sequestration curves provided by Sohngen (2005), which describe the average annual cost of sequestration for selected world regions. Results show that afforestation and timber management could lead to substantially lower policy costs if included. By allowing afforestation alone it is possible to achieve the 30% emissions reduction target with an additional European effort of only 0.2% compared with the cost of a 20% emissions reduction without afforestation. The introduction of these alternatives for mitigating climate is expected to reduce carbon price by around 30% in 2020 and the already contained leakage effect (around 1%), coming from an independent European commitment, by 0.2%.

Keywords: Resource/Energy Economics and Policy; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 26
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332170

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