Goal Conflicts and the Swedish National Environmental Objectives

Transcription

1 Goal Conflicts and the Swedish National Environmental Objectives Göran Bostedt Dept. of Economics, Umeå University and Dept. of Forest Economics,

2 A research programme focused on how to assess benefits and costs in the area of environmental decision-making. Aims at developing theory and methods for applying cost-benefit analysis (CBA) to problems involving environmental policies and management. Financed by the Swedish EPA. Thematic areas: Distributional issues Risk, uncertainty and resource dynamics Valuation and benefit transfer Goal conflicts

3 Goal conflicts and side gains Connections and interactions between policy measures and environmental objectives Actions taken to achieve a specific social objective generally have effects on other social objectives positive or negative How does the target level for one environmental goal affect the cost and possibilities to reach another environmental goal?

4 Damned if you do, Damned if you don't Reduced Climate Impact vs. Sustainable Forests in Sweden Purpose Erik Geijer, Göran Bostedt & Runar Brännlund Resource & Energy Economics, Vol. 33 (2011) The purpose is to analyze the goal conflict between the environmental objectives Sustainable Forests and Reduced Climate Impact. by: Assessing possible effects of a implementation of the objective sustainable Forests on the supplied quantity of biofuels within the forest sector, and thereby the effect on the goal concerning emissions of greenhouse gases.

5 Reduced Climate Impact Average emissions of greenhouse gases for the period should be at least 4% lower than in 1990 (calculated as carbon dioxide equivalents) No allowance is to be made for uptake by carbon sinks or for flexible mechanisms. Implemented e.g. carbon taxes, quota systems for the electricity market and trough trading with emission credits. The part of the energy sector that can substitute away from non-renewable fuels have, or will, do so

6 Demand wood fuel

7 TWh Wood fuel in the heating sector

8 Sustainable Forest (Interim targets) Long-term protection of forest land A further 900,000 hectares of forest land of high conservation value will be excluded from forest production by the year Enhanced biological diversity Increasing the quantity of hard dead wood by at least 40% throughout the country and considerably more in areas where biological diversity is particularly at risk;

9 Forest land area (1000 ha) Total Forest land: (27 997)* Protected forest: 751 (4443)** 3.3 % (15.3 %) Sustainable forest: A further ha or 4 % of the total forest land *,**: According to international definitions *: FAO (Food and Agriculture Organization) **: MCFFE (Ministerial Conference on the protection of forests in Europe)

10 Two opposing forces?

11 FORESTRY Forestry sector model and the flow of biomass Logs Pulp wood Wood fuel Sawn goods Pulp Heat Sawmills Chips Pulpmills Heating plants

12 Supply and demand functions for forest products Forest owners are assumed to choose the quantities of different assortments that maximize profits at given prices. This is made conditional on the forest assets and cutting costs. The remaining actors in the model use raw materials from the forest as an input in their production process; the pulp industry, the saw mill industry and the heating industry. We assume that pulp mills use labor, energy and capital to convert pulpwood into pulp, and that the saw mills and heating plants use the same types of production factors to convert sawtimber into sawn goods and wood fuels into heating. Finally we allow for technological development (by including a linear technological progress term (t)) and for lags in the adjustment to price change (by a partial adjustment term (x i(t-1) )). This means that if a price changes, demand does not necessarily adjust completely within one period. This also means that we can estimate both short run (within one year) and intermediate run effects.

13 Data Annual time series data covering the period Unsurprisingly - this relatively long period of time contain some changes with respect to e.g. which agency that produces certain statistics. what they measure. how they measure it. there are occasions where two subseries have had to be fitted against each other with help of a scalar.

14 Econometric specification We assume that technology in each industry can be represented by a Generalized Leontief profit function, an assumption that is flexible, yet still allows us to estimate parameters on demand and supply in each market. Remember, supply and demand in three markets, pulp, sawn timber, and wood fuel gives six equations to be estimated simultaneously. Estimation proceeded through an econometric technique called threestage least squares regression, which allows several equations to be estimated in the same time. A variable was also included to account for the 2005 storm Gudrun, which increased the supply from forest owners.

15 Estimation results: Price sensitivity Supply response to price Demand response to price

16 Simulation results The effect of the goal Sustainable Forests on the supply of sawn timber, pulp wood and most important wood fuel

17 Conclusions Protection of forests will decrease the supply/demand of forest fuel. The decrease in supply of wood fuel will decrease output from district heating plants by 2 TWh. If oil is used as substitute Swedish CO 2 emissions will increase 600,000 tonnes, rather than decrease, as the goal Reduced Climate Impact prescribes. A cost-benefit analysis of one environmental goal will be contingent on target levels for other environmental goals.

18 Safeguarding Species Richness vs. Increasing the use of Renewable Energy The Effect of Stump Harvesting on Two Environmental Goals. Erik Geijer, Jon Andersson, Göran Bostedt, Runar Brännlund & Joakim Hjältén Journal of Forest Economics, Vol. 20, pp Purpose The purpose is to analyze the goal conflict between the environmental objectives Reduced Climate Impact and A Rich Diversity of Plant and Animal Life. by: Assessing possible effects of a implementation of the objective Reduced Climate Impact through increased implementation of stump harvesting in northern Sweden, and the consequent effects on biodiversity.

19 Reduced Climate Impact Average emissions of greenhouse gases for the period should be at least 4% lower than in 1990 (with current policies, the expected outcome is about 15 % below 1990) By 2020 emissions of greenhouse gases in Sweden, from activities not included in the EU Emissions Trading Scheme, will be reduced by 40% compared with (with current policies, the expected outcome in 2020 is about 25 % below 1990)

20 A Rich Diversity of Plant and Animal Life (Interim targets) The loss of biodiversity in Sweden should be halted by 2010 Enhanced biological diversity Given the importance of CWD (Coarse Woody Debris) for forest biodiversity another sub-goal is to increase dead wood volume.

21 Stump harvesting as a way of increasing the supply of wood fuel. The main inspiration for stump harvesting in Sweden comes from Finland. Deemed as very interesting by Swedish forest companies such as SCA and StoraEnso. Currently (2010), stump harvesting is conducted by StoraEnso in the counties of Västergötland, Östergötland, Småland and Halland.

22 Two parts: The Model A model describing the interlinkages between the different parts of the forest sector, A second model describing the relation between stump harvesting and biodiversity via the changes in dead wood. The region is logging area one an administrative district roughly corresponding to the four northernmost counties in Sweden. The motive for choosing this area is that the ecological data is mainly relevant for this area. Again, the parameters for the forest sector model are estimated with three stage least squares.

23 The Model (cont.) The ecological model originates from an experiment conducted at ten localities situated in the counties of Västerbotten and Västernorrland - basically the same region of Sweden. The data allows for predictions of the effects from stump harvesting on population densities of beetles that demand dead wood - used as proxy for biodiversity. The ecological analysis showed that stump harvesting will reduce the population density of saproxylic beetles per ha in a an approximately one to one relationship, i.e. if 80 percent of the stumps are harvested about 80 percent of the population remaining on the clear-cut is gone.

24 Simulations (Remember: relevant for northern Sweden) In the simulations we will assume that the demand for biofuels, originating from heating plants within cutting area one, will increase by 0.6 TWh/year (equivalent to approximately 350,000 m3 wood). If stump harvesting is not allowed more than 80 % of the increased demand is satisfied through reductions in the supply of saw timber and pulp wood. If stump harvesting is allowed this figure reduces to 25 %. Thus stump harvesting greatly mitigates the competition for wood resources.

25 Results However, stump harvesting also results in a reduction of the population of beetles that demand dead wood by almost 5 % annually. This means that future stump harvesting projects, with the aim to fulfill the objective Reduced Climate Impact, might have a negative impact on the objective A Rich Diversity of Plant and Animal Life. No nonmarket value of lost biodiversity has been estimated in this paper. It is clear that a cost-benefit analysis of an increased use of biofuels through stump harvesting that does not take the goal conflict with respect to biodiversity into account, would seriously underestimate the costs of such a solution to the increased demand for carbon-neutral energy.

26 Goal Conflicts Goal conflicts are all too common in environmental policy. Decisions are made that society should strive towards reaching, individually, worthwhile goals without contemplating whether these goals may actually be contradictory. One consequence of goal conflicts of the type illustrated here is that the cost of achieving a specific individual target may be underestimated if no effort is made to account for such conflicts. Thus, environmental policy should be viewed in a comprehensive way that includes all environmental objectives that affect our resource use. These papers have illustrated serious goal conflicts between environmental objectives. Future research will undoubtedly reveal others.

27 Thank you for your attention!