Carbon leakage through trade impacts of increased
harvest in Norway
Birger Solberg
Faculty of Environmental Sciences and Natural Resource
Management
Norwegian University of Life Sciences
I. Introduction
• The following (research) question is adressed: How much would the forest
harvest outside Norway change if the forest harvest in Norway changes by
10%, 30% or 50% relative to a Business As Usual (BAU) level?
• This question is closely linked to harvest leakage (and then carbon leakage)
through market and trade effects.
• Previous leakage analyses deal primarily with deforestation (REDD) impacts
and effects on agriculture production in less industrialized countries – rather
few studies exist on leakage impacts related to forest harvest in industrialized
countries and wood-based bioenergy.
• This presentation shows results from a recent CenBio study made in
cooperation with Dr. Maarit Kallio at Luke (The Natural Resourcees Institute
Finland). A paper of the study is recently sent a peer-reviewed scientific
journal, and not accepted yet – so this presentation gives preliminary results.
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II. Methodology
1. Apply the global partial equilibrium forest sector model EFI-GTM, which
includes the following main data and assumptions:
 The global forest sector (forestry and forest industries) divided in 60 regions, of
which 31 are countries in Europe, and with Norway as one region.
 18 final forest industry products (including 2 sawnwood, 4 boards, 8 paper and 4
bioenergy product types), all with regional specific demands.
 16 intermidiate products (including sawlogs, pulpwood, forest residues, sawmill
chips and residues, 3 types of chemical pulp, 4 types of recycled paper).
 Production costs and use of wood for all the above products for each region.
 Trade costs between each region for each product.
 Profit maximizing producers and pre-determined economic growth for each region.
Thus the model simulates the develpment of production, consumption, price and
trade of each of the products for each year during 2015-40 by securing that supply
equals demand in each region for each year and each product, including trade.
 Probably the most advanced global forest sector model in use today
(For more detailed description of the model see Kalllio, Moiseyev & Solberg (2004),
Solberg, Kallio and Toppinen (2010) and Moiseyev, Solberg & Kallio (2013))
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Methdology (continued..)
2. Define the harvest leakage ratio as
At/Bt
where At is the annual harvest change in year t outside Norway caused by
an initial harvest increase of Bt in Norway in year t.
3. Specify harvest level changes Bt corresponding to 10%, 30% and 50% of
two pre-defined Business As Usual (BAU) scenarios. The Norwegian harvest
changes are assumed to be introduced gradually from 2015 so they reach full
implementation in 2020.
4. The two BAU scenarios are applied to test out how sensitive the results are
regarding assumed global demand for wood-based bioenergy:
a) HIGH demand, where it is assumed that the global bioenergy use
secures meeting the IPCC climate change mitigation target of 2.0 oC.
b) LOW demand, where the global consumption of wood-based biofuel is
only 25% of the consumption in alternative HIGH. (By 2040 the global
annual use of wood for biofuel production is assumed to be 760 mill
m3 and 190 mill m3 in respectively the HIGH
and LOW alternative).
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III. Main results:
Harvest leakages at 10%, 30% and 50% changes of Norway’s
harvests in each of two future BAU situations for the global
consumption of wood-based bioenergy: a) Assuming the LOW
demand case, and b) assuming the HIGH demand case – i.e. a
global bioenergy use that secures meeting the IPCC climate
change mitigation target of 2.0 oC
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IV Conclusions
1. The harvest leakage ratio varied between 0.6 and 1.0, and is some higher
in biofuel demand alternative LOW compared to demand alternative HIGH.
2. Harvest leakage is not the same as carbon leakage, because carbon
emission in transport and forest industry/bioenergy productions, substitution
effects, and differences in forest growth in various countries are not
included in the estimates of harvest leakage.
However, our estimates of harvest leakage are likely to be lower than
corresponding estimates of carbon leakage - because the Norwegian
forest sector (forestry, forest industries and bioenergy productions) is
based on more hydro-power electricity and bioenergy and thus
consuming less fossil fuels than similar productions in most of RoW.
3. To get correct results when estimating climate mitigation impacts of
increased harvest in Norway – for example for increased bioenergy production
– it is necessary to consider the harvest leakage impacts, and even better the
carbon leakage impacts.
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Thank you for your attention!