1) Tausta ja tavoitteet
Research Questions:
Q1: What is the optimal policy for the joint-regulation of the climate impacts of forest carbon storage and albedo? What kind of economic incentives are needed to decentralize the optimization of forest climate to private landowner’s who are responsible for land use and forest management decisions?
Q2: How would the optimal regulation of forest carbon storage and albedo affect the Finnish forest and energy sectors? How large is the benefit compared to regulating carbon only?
Q3: How large a benefit can be obtained by optimally managing the global forests for climate change mitigation, compared to only partial regulation? How much can the benefits be increased by taking both carbon and albedo into account instead of carbon only?
2) Toteutus
We propose to study the joint optimization of forest management for timber and climate regulation. The included climate impacts are carbon and albedo. We derive the socially optimal policy which equates the marginal social costs and benefits of mitigation. We analyze what kind of economic incentives are needed to decentralize the optimal policy to private land-owners, who ultimately make the land use and forest management decisions. As a case study, we investigate how such regulation would affect the Finnish forest and energy sectors and how large an overall benefit could be obtained by regulating both climate impacts. Furthermore, we develop a global Integrated Assessment Model (IAM) to assess the benefits of extending the global regulation of forests’ climate impacts. Two kinds of extensions are considered: (1) the inclusion of all global forests in climate policy and their socially optimal regulation for carbon storage, and (2) their regulation for both carbon and albedo.
3) Tuotokset
An optimal policy for jointly regulating forest carbon and albedo will be derived. The results will be published in international peer-reviewed academic journals, seminars and workshops.
4) Vaikuttavuus ja käytäntöön vienti
Once an optimal policy has been derived, it can be applied anywhere, where land is privately owned.
Implementing the optimal policy can ease climate change mitigation. Academic work in this field has a good track record in influencing policy. After 20 years of research, New Zealand ETS included forests. Is albedo next? The ETS itself is another example of a policy that began as an academic exercise (Coase 196X, Dales 196X, Baumol and Oates 1971), but is now an important climate policy instrument in the EU and elsewhere.
5) Asiakkaat
The results promote the development of efficient climate policy. Relevant target groups: Scientists, Policy community, Politicians, General public
