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Modeling The Economics Of The Reference Levels For Forest Management Emissions In The Eu

Author

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  • JANI LATURI

    (Natural Resources Institute Finland (Luke), Jokiniemenkuja 1, FI-01370 Vantaa, Finland)

  • JUSSI LINTUNEN

    (Natural Resources Institute Finland (Luke), Jokiniemenkuja 1, FI-01370 Vantaa, Finland)

  • JUSSI UUSIVUORI

    (Natural Resources Institute Finland (Luke), Jokiniemenkuja 1, FI-01370 Vantaa, Finland)

Abstract

In the Durban climate change conference of UNFCCC in 2011 new accounting rules were agreed for forest sector in Annex I countries to provide incentives for forest management and emission mitigation. There was also pressure to modify accounting rules to avoid giving credits for sequestration which would occur naturally. New accounting rules are based on reference levels against which greenhouse gas emissions and sinks resulting from forest management are compared during the second commitment period (2013–2020) of the Kyoto Protocol. In this study we investigate the timber market impacts and the effectiveness of the reference level policy in promoting forest management actions in the EU countries. We also study how setting of caps for policy-based gains affects the effectiveness of the policy. We found that the policy enhances carbon sequestration, if it is implemented in such a way that it affects harvests. The market impacts and the effects on forest sinks can be substantial in countries where non-LULUCF sector emissions are high relative to the potential of forest resources to act as sinks. In smaller countries with relatively large forest resources, the effectiveness of the policy is dampened by upper limits imposed on the emission compensations. The results of our study can be used to improve the effectiveness of policies in climate change negotiations.

Suggested Citation

  • Jani Laturi & Jussi Lintunen & Jussi Uusivuori, 2016. "Modeling The Economics Of The Reference Levels For Forest Management Emissions In The Eu," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-22, August.
    • Handle: RePEc:wsi:ccexxx:v:07:y::i:03:n:s2010007816500068
    DOI: 10.1142/S2010007816500068
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    References listed on IDEAS

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    1. Giacomo Grassi & Michel Elzen & Andries Hof & Roberto Pilli & Sandro Federici, 2012. "The role of the land use, land use change and forestry sector in achieving Annex I reduction pledges," Climatic Change, Springer, vol. 115(3), pages 873-881, December.
    2. Gold, Stefan & Korotkov, Alexander & Sasse, Volker, 2006. "The development of European forest resources, 1950 to 2000," Forest Policy and Economics, Elsevier, vol. 8(2), pages 183-192, March.
    3. Andrew Kerr Macintosh, 2012. "LULUCF in the post-2012 regime: fixing the problems of the past?," Climate Policy, Taylor & Francis Journals, vol. 12(3), pages 341-355, May.
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    Cited by:

    1. Päivinen, Risto & Kallio, A. Maarit I. & Solberg, Birger & Käär, Liisa, 2022. "EU Forest reference levels: The compatible harvest volumes compiled and assessed in terms of forest sector market development," Forest Policy and Economics, Elsevier, vol. 140(C).
    2. Kallio, A. Maarit I. & Solberg, Birger & Käär, Liisa & Päivinen, Risto, 2018. "Economic impacts of setting reference levels for the forest carbon sinks in the EU on the European forest sector," Forest Policy and Economics, Elsevier, vol. 92(C), pages 193-201.
    3. Pohjola, Johanna & Laturi, Jani & Lintunen, Jussi & Uusivuori, Jussi, 2018. "Immediate and long-run impacts of a forest carbon policy—A market-level assessment with heterogeneous forest owners," Journal of Forest Economics, Elsevier, vol. 32(C), pages 94-105.

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