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Carbon sinks in mitigating climate change. Evaluation with models of varying scope

Journal Article:

Abstract

This dissertation examines the economywide and sectoral impacts of emissions reduction targets and policy measures implemented to mitigate climate change. The special attention is given to analysis of carbon sinks and their role in achieving the emission limits. The analysis is based on applying numerical methods. The emphasis of the methods is on the computable general equilibrium modeling, while the stand level model describing the behavior of the forest owner is applied in one of the essays. The first essay describes the computable general equilibrium (CGE) model for Finland built by the author. The novelty of the model is to include endogenous carbon sequestration with timber supply and incentives to increase carbon sinks in a CGE framework. This enables the evaluation of the importance of forest carbon sequestration in achieving the given emission target. The marginal cost curves for reducing fossil fuel emissions and emissions from wood are calculated in the study. The results suggest that with small reductions of net emissions it is cost-efficient to reduce only the emissions from fossil fuels, while when stabilizing the net emissions to the level of year 1990 nearly half of the emission reduction is achieved by increasing the carbon sink. Although the  More>>
Authors:
Publication Date:
Jul 01, 2010
Product Type:
Journal Article
Resource Relation:
Journal Name: Acta Universitatis Oeconomicae Helsingiensis A; Journal Volume: 18; Journal Issue: 362; Other Information: Thesis or Dissertation; TH: Thesis (D. ScEcon)
Subject:
54 ENVIRONMENTAL SCIENCES; CLIMATIC CHANGE; AIR POLLUTION ABATEMENT; CARBON SINKS; MATHEMATICAL MODELS; FORESTRY; ENERGY; ECONOMICS
OSTI ID:
1008051
Research Organizations:
Aalto University, Espoo (Finland). School of Economics
Country of Origin:
Finland
Language:
English
Other Identifying Numbers:
Journal ID: ISSN 1237-556X; TRN: FI1103019
Submitting Site:
FI
Size:
page(s) 1-30
Announcement Date:
Mar 14, 2011

Journal Article:

Citation Formats

Pohjola, J. Carbon sinks in mitigating climate change. Evaluation with models of varying scope. Finland: N. p., 2010. Web.
Pohjola, J. Carbon sinks in mitigating climate change. Evaluation with models of varying scope. Finland.
Pohjola, J. 2010. "Carbon sinks in mitigating climate change. Evaluation with models of varying scope." Finland.
@misc{etde_1008051,
title = {Carbon sinks in mitigating climate change. Evaluation with models of varying scope}
author = {Pohjola, J}
abstractNote = {This dissertation examines the economywide and sectoral impacts of emissions reduction targets and policy measures implemented to mitigate climate change. The special attention is given to analysis of carbon sinks and their role in achieving the emission limits. The analysis is based on applying numerical methods. The emphasis of the methods is on the computable general equilibrium modeling, while the stand level model describing the behavior of the forest owner is applied in one of the essays. The first essay describes the computable general equilibrium (CGE) model for Finland built by the author. The novelty of the model is to include endogenous carbon sequestration with timber supply and incentives to increase carbon sinks in a CGE framework. This enables the evaluation of the importance of forest carbon sequestration in achieving the given emission target. The marginal cost curves for reducing fossil fuel emissions and emissions from wood are calculated in the study. The results suggest that with small reductions of net emissions it is cost-efficient to reduce only the emissions from fossil fuels, while when stabilizing the net emissions to the level of year 1990 nearly half of the emission reduction is achieved by increasing the carbon sink. Although the reduction is larger in terms of net emissions than gross emissions, the carbon tax needed to achieve the reduction is lower in case of net emission reduction. The welfare loss is of similar magnitude in both cases. The study provides the sensitivity analysis related to the parameter values and assumptions in the model.The second essay provides the detailed analysis on economywide, sectoral and trade impacts of inclusion of carbon sinks in the Kyoto protocol. The focus of the analysis is on the special treatment for Canada and Japan that allows them larger sinks. The analysis is performed with the multi-region computable general equilibrium model GTAP-E. Carbon sinks are modeled exogenously by adjusting the amounts of regional emission reductions. The results show that the gains from carbon sinks are not distributed evenly among countries. Carbon sinks partly reduce the difference in economic burden of achieving the Kyoto target among countries. Special treatment clearly benefits Canada and Japan. Trade-induced effects on other countries are however marginal, unlike in the case of the US withdrawal. The results indicate that Canada benefits from the US withdrawal in spite of losing competitiveness of emission intensive products. The third essay differs from standard GTAP-E calculations by incorporating results from the energy sector model with a detailed technology description. The first part of the essay provides an overview of different approaches to incorporate both top-down and bottom-up features in a hybrid model. The second part introduces one example of soft-linking two large global models, namely the economywide model GTAP-E and the energy sector model Global Times. The model systems is applied to evaluate the impacts of reducing GHG emissions according to 2 deg C target introduced by the EU, with global emission trading. According to the results, the 2 deg C target implies moderate reductions in global GDP and production levels while in some regions sectoral impacts are notable. The calculations indicate that the results from GTAP-E - Global Times model system differ to some extent from the ones obtained from stand-alone GTAP calculation. For regional production levels, the results are qualitatively different for some sectors while the economywide impacts are quite similar. The fourth essay contributes to the literature by including thinnings as a measure to increase carbon sequestration in forests, in addition to lengthening the rotation. A joint production model of timber production and carbon sequestration is used to analyze the financially optimum silvicultural strategies at the stand level in Finland. The results indicate that in joint production both the growing stock level and rotation length are increased, compared to pure timber management. The results show clearly the importance of including thinnings in the analysis. For Scots pine stands, a major share of the increase in average carbon storage during the rotation period is obtained by modifying thinnings. On the other hand, in the case of Norway spruce, delaying the clearcutting provides most of the increase in average carbon storage. The carbon tax/subsidy programme is found to increase discounted net revenues to the forest owners considerably, when starting from bare land. The carbon tax/subsidy programme have a positive impact on the average timber yield due to the considerable increase in the yield of sawlog, whereas the yield of pulpwood is somewhat decreased. (orig.)}
journal = {Acta Universitatis Oeconomicae Helsingiensis A}
issue = {362}
volume = {18}
place = {Finland}
year = {2010}
month = {Jul}
}