October 18, 2012

Trading Woody Biomass and Negative Emissions Under a Climate Mitigation Scenario

On October 1 Alice Favero presented our joint paper on trade of woody biomass at the conference "Power Generation and the Environment, Choices and Economic Trade-offs" organized by the University of Wyoming School of Energy Resources and the Center for Energy Economics and Public Policy at Jackson Hole, WY.

The link to the presentation here.
The link to the video here.

Favero, Alice and Emanuele Massetti. 2012. "Trading Woody Biomass and Negative Emissions Under a Climate Mitigation Scenario." Yale University and FEEM, mimeo.

Bio-energy has the potential to be a key mitigation option if combined with carbon capture and sequestration (BECCS) because it can generate electricity and absorb emissions at the same time. However, biomass is not distributed evenly across the globe and regions with a potentially high demand might be constrained by limited domestic supply. Therefore, climate mitigation policies might create an incentive to trade biomass internationally. This paper evaluates the potential of the trade of woody biomass under three carbon taxes which lead to a stabilization target of 4.6 W/m2, 3.8 W/ m2 and 3.3 W/ m2 radiative forcing by 2100 using the integrated assessment model WITCH. Results show that in all scenarios there is big incentive in trading biomass: more than 50% of biomass consumed globally is from the international market. Regions trade 16-52 EJ in 2050 and 52-84 EJ/yr in 2100. The value of biomass traded is equal to  US$ 1-9 Trillion in 2100. The effect of the biomass trade on the climate polices is significant: it offers an additional abatement of GHGs emissions of 150-340 GtCO2 for the same tax depending on the scenario. Finally, we simulate a cap-and-trade scheme with a stabilization target of 3.8 W/ m2 in 2100 in order to study the implications of biomass trade on the carbon market. We found that biomass trade has a downward effect of 30% on the price of permits by 2100 and reduces the policy cost by 11% for 2010-2050 and by 15% for 2010-2100.

The link to the program and other presentations here.

October 1, 2012
Session One: CCS Themes
The Cost of Power Generation with CCS vs. the Alternatives
Howard Herzog, Senior Research Engineer, Massachusetts Institute of Technology Energy Initiative

A Flexible Policy Mechanism to Incentivize "CCS-ready" Without Delaying Replacement of Old Coal-fired Power Plants
Dalia PatiƱo-Echeverri, Gendell Assistant Professor for Energy Systems and Public Policy, Duke University

The Challenges of CCS for an Operating Utility
Ron Harper, Retired CEO of Basin Electric and Cooperative

Keynote Address
A Practitioner's Guide to a Low-carbon Economy: Lessons From the UK
Samuel Fankhauser, Co-Director of the Grantham Research Institute on Climate Change and the Environment and Deputy Director of the Center for Climate Change Economics and Policy

Session Two: Policy
On Designing an Efficient CO2 Emissions Cap and Trade System
Scott Atkinson, Professor, University of Georgia Department of Economics

The Competitiveness Impacts of Climate Change Mitigation Policies
Joseph Aldy, Assistant Professor of Public Policy, Harvard Kennedy School

Environmental Policies on the Grid:  Findings from an Integrated Economic, Engineering, and Environmental Model
Daniel Shawhan, Assistant Professor, Department of Economics, Rensselaer Polytechnic Institute

Session Three: Regulation Analysis Themes
The Impact of CO2, NOx, and SO2 Regulation on Electricity Production
Rolf Fare, Department of Economics and Department of Agriculture and Resource Economics, Oregon State University

Costs and Emissions Reductions from Clean Air Act Regulation of Greenhouse Gases from Coal-Fired Power Plants
Joshua Linn, Fellow, Resources for the Future

Can a Unilateral Carbon Tax Reduce Emissions Elsewhere?
Don Fullerton, University of Illinois, Department of Finance

October 2, 2012
Session Four:  Alternative Resources
Trading Woody Biomass and Negative Emissions Under a Climate Mitigation Scenario
Alice Favero, Visiting Research Assistant, Yale School of Forestry & Environmental Studies

New Cost Estimates for Forest Carbon Sequestration in the United States
Andrew Plantinga, Professor, Department of Agricultural and Resource Economics, Oregon State University

Uranium and Nuclear Power: Past, Present and Future
Charles Mason, UW Department of Economics & Finance; H.A. True Chair in Petroleum and Natural Gas Economics

Session Five: Costs & Pricing
Pricing Carbon in the US: A Model-based Analysis of Power Sector Only Approaches
Adele Morris, Fellow and Policy Director for the Climate and Energy Economics Project, The Brookings Institute

Estimating the Value of Additional Wind and Transmission Capacity in the Rocky Mountain West
Robert Godby, Associate Professor, UW Department of Economics and Finance

Evaluating Climate Policy Portfolios in the Electricity Sector: The Role of Multiple Market Failures
Carolyn Fischer, Resources for Future

Analysis of the Bingaman Clean Energy Standard Proposal
Karen Palmer, Senior Fellow and Research Director, Resources for Future