Cost effectiveness of measures for the reduction of net accumulation of carbon dioxide in the atmosphere

PII:

Biomass and Bioenergy Vol. 15, Nos 4/5, pp. 299±309, 1998 # 1998 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0961-9534/98 $ - see front matter S0961-9534(98)00038-5

COST EFFECTIVENESS OF MEASURES FOR THE REDUCTION OF NET ACCUMULATION OF CARBON DIOXIDE IN THE ATMOSPHERE BO HEKTOR SIMS/SLU, Box 7054, S-750 07 UPPSALA, Sweden AbstractÐIn this paper a method is presented for comparison of the cost e€ectiveness of mitigation of net emissions of greenhouse gases, mainly carbon dioxide (CO2), by measures carried out in di€erent parts of the carbon cycle. The method is applied on forest production and wood fuels. Two roles are distinguished for forests in the carbon cycle: the role of biomass build-up, e.g. the process to ®x carbon into biomass from CO2 in the atmosphere, and the role of a carbon store in wood and other biomass to be used as a sink or as a source for wood fuels. The two roles are interdependent and are related to the age of trees and other conditions of the forest stands, and can be in¯uenced by forestry activities. The costs of reducing CO2 emissions by using wood fuels substituting fossil fuels are analysed and presented for a situation represented by the Swedish district heating system. It was found that the costs of replacing fossil fuels by biofuels generally are considerably lower than the corresponding level of the Swedish taxes on fossil fuels. In some cases wood fuels were found to be cheaper than fossil fuels irrespective of taxes. Comparisons between the costs of mitigation measures to reduce CO2 net emissions by wood fuel combustion and those aiming at increased storage of carbon in the forests strongly indicate that combustion measures are more cost e€ective, especially in a long perspective. # 1998 Elsevier Science Ltd. All rights reserved KeywordsÐBiomass; CO2 emissions; cost comparison.

1. INTRODUCTION

formation and data for the various parts and processes in the carbon cycle. For some of these processes, e.g. combustion, rather precise data are available, for others, e.g. some biological processes, only vague and/or scattered information is available. Besides the use of fossil fuels, the study primarily covers forests, forestry, forest products and wood fuels, thus dealing with the most salient factors for in¯uencing the carbon net emissions under Swedish conditions. However, the principal framework of the model could also be applied on other alternative energy sources. In Fig. 1, the darker shades illustrate the long term deposits of carbon (``sinks''); lighter shades show medium term storage of carbon. The forms and lines around the symbols indicate the stability of the storage; a hard line and symbol means a stable deposit, etc. The arrows illustrate ¯ows and processes. The direction of the arrow indicates the route of the ¯ow. In most cases the ¯ows and processes are irreversible. The double headed arrows from the fossil fuel deposits illustrate the fact that substitution in¯uences the ¯ow of fossil fuel from the deposits.

The carbon cycle is a complex system of various processes and components. One of the most intensively discussed issues is the accumulation of greenhouse gases, in particular carbon dioxide, in the atmosphere and the related discussions on climate change. The issue is of high political priority and various measures aiming at reducing the increase of CO2 in the atmosphere are being considered and some are also being implemented. Examples of such measures are to increase the ®xation of carbon in growing vegetation (sequestration) and to reduce the carbon ¯ow from fossil fuels, e.g. by increased use of biofuels (substitution). The study presented in this paper puts the emphasis on the system e€ects of the entire carbon cycle and discusses the possibilities of comparing the costs and e€ects of various measures for the reduction of the greenhouse e€ects introduced in di€erent parts of the cycle. With the principal aim to arrive at a strategy that minimises the cost of reaching a speci®c target for the net emissions, the study makes an evaluation of the availability of in299

300

B. HEKTOR

Fig. 1. The role of forestry in the carbon cycle. The ®gure is based on a ¯ow chart.19 (A) Exchange of carbon between atmosphere and vegetation and net accumulation of carbon in vegetation. (B) Emissions of carbon from decomposition processes. (C) Formation of litter. (D) Accumulation of carbon in soil. (E) Harvesting of biomass and production of wood products, paper, and biofuels. (F) Combustion of biomass (biofuels, waste paper and wood) substituting fossil fuels. (G) Use of paper (substituting fossil oil products). (H) Use of wood products, substituting products made from fossil oil and by use of energy from fossil fuels. (I) Energy used and losses in the extraction and transportation of fossil fuels. (J) Use of fossil fuels in the production and transport of biofuels, paper, and wood products. 2. CARBON LOOPS

2.1. Assimilation and breathing of vegetation (Fig. 1(A)) The most massive gross ¯ow of carbon is the exchange of carbon between the atmosphere and the vegetation in the form of assimilation and breathing. That reciprocal process takes place day and night in the vegetation period and if aggregated the annual ¯ow of carbon is very large.1 Only a small fraction of the carbon in the ¯ow is ®xed in biomass. However, only the carbon ®xed in the buildup of biomass is considered further in this paper. 2.2. Biomass accumulation and utilisation The carbon in built-up biomass will sooner or later move along the various routes shown in Fig. 1. For Swedish conditions the structure of that carbon ¯ow for the forests is shown in Table 1.2 One must keep in mind that the values in Table 1 represent a momentary picture of the conditions. The forest conditions are changing continuously, which in¯uences the structure of the carbon balance. The present trends in Swedish forestry, that the cutting of stem wood is considerably less than the growth, lead to older stands, which will lead to decreasing biologic viability, e.g. with regard

to carbon assimilation. As the current growth of the total biomass of a tree culminates earlier than that of stem wood, this senescence e€ect will become evident earlier for the total biomass growth than for the growth of stem wood.3,4 Another dynamic factor is the increase of the share of spruce in the Swedish forests. The biomass/stem-wood rate is higher for spruce than for pine but spruce is normally more short-lived than pines. Both these facts in¯uence the process mentioned above.3 The increase of carbon storage in forest biomass can take place in two forms, (1) enlargement of the forest area and (2) increase of stand density and/or structure. In the case of Sweden the increase option of carbon storage is mainly to increase the biomass content in existing ageing stands. To a large extent this has already been achieved by application of intensive silvicultural measures which have led to growth rates higher than those which can be expected in natural stand. The implications of this fact are further discussed in connection with the cost appraisals later in this paper. In a balanced forest ecosystem with no wood harvesting, the carbon loop (A-C-B in Fig. 1) is close to neutral in relation to net emissions. Over time, the build-up process of carbon balances the emissions from decomposition. In general terms that seems to be true also for forests under sustained management, also in cases when logging residues are removed and utilised. Thus, studies on Swedish conditions have found that the carbon content of the upper soil level is not signi®cantly di€erent after 20 years for sites where the logging resiTable 1. The carbon balance in Swedish Forestry 1990 Biomass build-up

Mtonne C/year

±Stem wood (incl. bark and top) ±Branches ±Surface litter ±Stumps and large roots (>2 mm) ±Fine roots ±Other vegetation Total Transfer and sink ±Stem wood (E) ±Branches and tops (E) ±Natural decomposition ±Increase of carbon storage (denser forest stands) Total

25 22 4 11 19 20 100 13 0.311 78 9 100 19

Present removal (1996) estimated to 1.5 . Source: Eriksson2

Cost e€ectiveness of net accumulation of carbon dioxide in the atmosphere

dues were removed (and used for fuel) and for those where the residues have decomposed naturally in the site.5 According to the values in Table 1, also in the cases of intensive wood harvesting in sustained forestry, the predominant route for the carbon is to re-enter into the atmosphere in the form of carbon dioxide after natural decomposition of the biomass at the site. A minor part of the carbon ¯ow is ®xed for longer periods in the deeper layers of the soil (Fig. 1(D)). The rate is small and hardly possible to measure in practical ®eld studies.5 Apart from certain measures related to forestry on organic soils, the soil carbon issue can be considered to be of little signi®cance with regard to its e€ects on the carbon cycle. The e€ects caused by change of land use, e.g. by a€orestation of previously treeless lands, are not concidered in this paper. 2.3. Harvesting (Fig. 1(E)) Harvesting of stem wood and other biomass will in¯uence both the carbon build-up process of the forests and the amount of stored carbon in the forest. Old stands that are harvested normally have a high amount of carbon stored in the biomass, but their net capacity to ®x carbon in the build-up process is low or negative. ``Net capacity'' means the di€erence between the build-up and the decomposition in the stand. The new young and vigorous stands established after the harvest have a small but growing amount of stored carbon but a high net capacity to ®x carbon in the build-up process. The normal forestry practices in Sweden include stand improvement thinning in young stands, which will reduce the carbon storage of the stand but increase and maintain the net carbon ®xing build-up process. Thus, regarding the e€ects on the carbon cycle, many options can be identi®ed for adapting harvesting to ®nd optimum solutions for the two roles of forests; carbon build-up and carbon storage. To arrive at these solutions, the e€ects on industrial wood production and harvesting will be important factors, as are the opportunities to in¯uence the carbon dioxide emissions by using forest biomass as a substitute for fossil fuels. Forestry in Sweden has a long tradition of sustained forest management aiming at ecient production of industrial wood, e.g. saw

301

logs and pulp wood. Therefore, there are reasons to believe that possible changes in the forest management and harvesting regimes to adjust for the carbon e€ects, can be developed within the framework of established methods. The state of knowledge regarding the ecological e€ects, inter alia of removal of logging residues is presented by RoseÂn.6 Another recent report on the subject by Egnell et al.7 con®rmed the main conclusions that removal of residues have only small e€ects on the growth of the succeeding forest stand. Generally, the e€ects are greater for spruce than for pine. The reduction of growth can be transformed into diminished carbon ®xation. In this paper the typical values presented in Table 2 are applied in the further analyses. In the continued analysis these values will be applied in the comparisons between the various biofuel systems and the fossil fuel systems. It must be kept in mind, however, that the value is a rough estimate in order to arrive at a typical value to be applied in this principal analysis. It is evident that in practical cases the values vary between sites and conditions. 2.4. Forest products 2.4.1. Paper recycling and waste paper (Fig. 1(E, G, F, J)). The production of paper from virgin or recycled ®bre, and the issue of recycling or burning wastepaper are very complex problems.8 This complexity is the reason why analyses of the problems seldom include the e€ects on the carbon cycle. In this paper, that very interesting area has to be left unattended due to lack of general data. However, the approach and the methodology applied below for biofuels would also be applicable for the paper loop. 2.4.2. Wood and wood products (Fig. 1(E, F, H, J)). The situation for traditional uses of wood and wood products is similar to the one for waste paper. An aspect relevant for analyses of wood and wood products with regard to CO2 emissions is the impact of substitution Table 2. Typical values for loss of carbon ®xation caused by reduced growth in forest stands established after removal of logging residues. (kg CO2/MWh for the heat value of the residues) Type of forest operation Clear cutting Stand improvement thinning Source: (Hektor21)

kg CO2/MWh energy content 15 7

302

B. HEKTOR

Table 3. Emission of carbon dioxide from extraction, handling, treatment and transport of various fuels. Typical values. kg CO2/MWh, e€. heat value, energy content in fuel Fossil gas Gasoline Butanol Diesel oil Light fuel oil Heavy fuel oil Coal Peat Industrial residues (bark) Industrial residues (saw dust, shavings, chips) Recycled wood products Rejected pulp wood Forest fuels from whole tree thinning operations* Logging residues from ®nal felling* Salix from short rotation plantations$

43 30 30 30 30 35 70 4 2

(4)

2 3 4

(4) (5) (6)

11 19 14

(13) (21) (16)

Source: (Hektor21, based on Hillebrand12, and Setzman14). *Includes ecological e€ects, see Table 2. $Includes assumed emissions from use of fossil energy in fertiliser production. Values in parentheses are for upgraded biofuel (briquettes, pellets, pulverised wood)

of products like concrete, steel, plastics, etc., which cause CO2 emissions in their production or extraction. Also in this ®eld data are scattered and can not be used as a basis for general economic analyses. The few studies that are published in this ®eld su€er from that lack of data.9,10 Therefore, wood and wood products are not dealt with further in this paper. However, the approach and the methodology applied below for biofuels would also be applicable for the wood and wood products loop. 2.4.3. Biofuels. Wood fuels used for energy generation (Fig. 1(F)) and thereby substituting fossil fuels reduce the carbon emissions by an amount that corresponds to the energy content of the avoided fossil fuel. In this analysis one must also consider the use of fossil fuels in the production and transport of biofuels, and also the energy used and losses occurring in the extraction and transportation of fossil fuels. Analyses are presented in this paper in the cost assessment part. The carbon emissions emanating from the use of fossil fuels in the production and transport of biofuels, and the emissions from energy used and from losses in the extraction and transportation of fossil fuels vary with

actual conditions. In the analyses in this paper the following values11±14 are applied. Values within brackets in Table 3 refer to upgraded biofuels (briquettes, pellets, pulverised wood). However, it is assumed that drying of biomass in the upgrading process is achieved by energy generated from biomass, while other energy input emanates from fossil fuels. In general, in comparison with biofuels, fossil fuels have higher values for emissions from extraction, handling, treatment and transport. The reasons for that are the leakage of gases, etc. in the extraction process, the use of fossil fuels in the handling and treatment, and the fuel used for long distance transport. Therefore, the total e€ects of carbon emissions when fuels are combusted is arrived at by adding the carbon in the fuel to the carbon emitted in the extraction, handling, treatment and transport of the fuels (Table 4). In the case of biofuels the net carbon emissions from the fuel is assumed to be zero. Thus, for biofuels, only the emissions from the extraction, handling, treatment and transport are accounted for. In addition, assumed ecological e€ects for logging residues also are included. Values within brackets in Table 4 refer to upgraded biofuels as in Table 3. 2.5. Net emissions from district heating plants District heating systems in Sweden normally have several boilers of di€erent types in their system and therefore they have the option to choose between using biofuel and fossil fuels in their day-to-day operations. Normally, both types of fuels are used in the system depending on variations of seasonal loads and prices, and the types of boilers available in the system. Therefore, it is relevant to compare the emissions from the various fuels for heat generation in district heating boilers. To get a fair basis for comparison, the variations in boiler eciency for typical boilers using di€erent fuels must be taken into consideration. Table 5 shows the boiler eciency, based on ecient (lower) heat values, and the net emissions from the generated energy (after boiler) for the most common fuels in district heating systems. The boiler eciency rates are typical values for modern boilers. Values within brackets in Table 5 refer to upgraded biofuels as in Tables 3 and 4. It is evident from the values in Table 5 that burning of coal gener-

Cost e€ectiveness of net accumulation of carbon dioxide in the atmosphere

303

Table 4. Emission of carbon dioxide from combustion of various fuels. Typical values; energy content in fuel kg CO2/MWh, e€. heat value, energy content in fuel fuel Fossil gas Gasoline Butanol Diesel oil Light fuel oil Heavy fuel oil Coal Industrial residues (bark) Industrial residues (saw dust, shavings, chips) Recycled wood products Rejected pulp wood Forest fuels; whole tree thinning operations* Logging residues from ®nal felling* Salix from short rotation plantations$

transport, etc.

202 216 234 266 266 281 360 ± ± ± ± ± ± ±

43 30 30 30 30 35 70 2 2 3 4 11 19 14

total 245 246 264 296 296 316 430 2 2 3 4 11 19 14

(4) (4) (5) (6) (13) (21) (16)

(4) (4) (5) (6) (13) (21) (16)

Source: (Hektor21). *Includes ecological e€ects, see Table 2. $Includes assumed emissions from use of fossil energy in fertiliser production. Values for upgraded biofuel (briquettes, pellets, pulverised wood)

ates most CO2 emissions among the fuels represented in the list. The application of ecient heat values in the calculations above follows common practice and recommendations. It can occasionally lead to awkward results, e.g. when ¯ue gas condensing technology is applied in heat boilers, which for wet fuels can result in eciency rates exceeding 100%. However, in the comparison of emissions between fossil fuels and biofuels, the e€ect of this factor is negligible as biofuels have low net emissions of CO2 per MWh. Fossil fuels are also used for the manufacturing of machines, etc., and in the building and construction of fuel and heat plants. However, the fuels and the energy used for those purposes are small in relation to the energy content of the fuel in the supply system

and consequently to the energy generated in the plant.15,16 Therefore, the e€ects of fossil fuels used for machines and buildings are not further considered in this paper. 3. COST ANALYSES

3.1. Analysis of the costs to avoid CO2 emissions by using biofuels substituting fossil fuels The analysis covers one speci®c case, namely district heating systems. The general approach can also be applied for other energy systems. However, the district heating system is chosen because of its relatively uncomplicated structure and because of availability of data and other information. The data in Table 5 represent the CO2 emissions emanating from burning di€erent fuels, expressed as kg CO2/MWht after boiler. If the

Table 5. Emission of carbon dioxide (and equivalents) from combustion of various fuels. Typical values; for energy generated (after boiler) kg CO2/MWh, e€. heat value energy in fuel Net emissions Fossil gas Light fuel oil Heavy fuel oil Coal Industrial residues (bark) Industrial residues (saw dust, shavings, chips) Logging residues from ®nal felling* Salix from short rotation plantations$

245 296 316 430 2 2 19 14

(4) (4) (21) (16)

Rate of boiler eciency(1); % 93 93 88 86 86 86 86 86

(92) (92) (92) (92)

Net emissions after boiler 263 318 359 489 2 2 22 16

(4) (4) (23) (17)

Source: (Hektor21). *Includes ecological e€ects, see Table 2. $Includes assumed emissions from use of fossil energy in fertiliser production. Boiler eciency, and wood fuel energy content, according to international standard, e.g. based on the e€ective (``lower'') heat value, which is di€erent from the American standard based on the calorimetric (``higher'') heat value

304

B. HEKTOR

costs for that energy generation are expressed in SEK/MWh the costs per kg of avoided CO2 will be arrived at by division. SEK=MWh ˆ SEK=kg CO2 kg CO2 =MWh The measure SEK/kg CO2 is also the unit in which the Swedish CO2-taxes are expressed, but with the di€erence that the taxes are charged on the fossil fuels before the combustion. The costs consist of fuel costs, which is normally the dominating part, and ``other costs'', mainly capital costs, R&M (repair and maintenance), and operation costs. For district heating plants, the operating costs are normally very small compared to the capital costs. R&M costs are, according to experience and in calculation practices, closely related and proportional to the capital costs. Therefore, in this paper ``other costs'' are estimated as the capital cost plus a ®x percentage. This means that fuel costs are considered variable cost and that ``other costs'' are regarded as ®xed cost. This generalisation is done in order to make a clear presentation. The prices and costs applied in the model are listed in Table 6. (For boiler eciency rates, see Table 5). The capital costs are calculated with the assumption that the boilers are used for base load generation, i.e. with more than 3000 load hours per year. Most of the price information and the data for calculation of capital costs are based on public statistics and reports. However, the prices of fossil gas are not publicly available. The gas prices are therefore estimated based on interviews with experts and users. The prices are listed excluding taxes and other fees. It could be argued

that some of the levies should be included, e.g. the sulphur tax, as that is not primarily imposed for CO2 reasons. However, as it is dicult to distinguish between ®scal and environmental reasons for the taxes and fees, the calculations in this paper have been performed on a basis excluding all taxes and fees. Data from Table 6 are applied in Table 7 to get a comparison on a cost basis regarding the CO2-emissions. The comparison is presented for four fossil fuels: fossil gas, light fuel oil, heavy fuel oil, and coal, and also for ®ve types of wood fuels, bark, sawdust, etc., logging residues, Salix from short rotation plantations, and upgraded wood fuels, i.e. briquettes, pellets, and pulverised wood. The logic of the analysis is that the cost di€erence between energy generated from biomass and energy from the various fossil fuels is related to the avoided CO2-emissions. That value is consequently expressed in SEK/kg CO2 avoided. In some cases, that value is negative, e.g. for inexpensive wood fuels from the industrial waste products bark and sawdust. The implication of negative values is that CO2 emissions can be reduced with a pro®t. The two principal cases illustrated in Table 7, the costs for avoided CO2 expressed as ``total costs'' and ``fuel costs'' obviously do not cover all practical situations. The values can be compared for situations representing calculations for new investment (total costs) and for choice of fuel in an existing boiler system (fuel costs). As been mentioned above, typical district heating systems consist of several boilers providing options to switch between di€erent fuels. Other situations occurring in practice, e.g. retro®t or closing an existing boiler for a new and di€erent one, are

Table 6. Fuel Prices and other Costs for Energy Generation in District Heating Systems Typical values. Taxes and environmental fees are excluded SEK/MWh, e€. heat value Fuel price/MWh energy in fuel Fossil gas Light fuel oil Heavy fuel oil Coal Industrial residues (bark) Industrial residues (saw dust, etc.) Logging residues from ®nal felling Salix from short rotation plantations Upgraded biofuels

135 133 94 68 70 85 105 112 157

Source: Hektor21, revised, based on data in Anon.20 (1 US$ = 7.50 SEK; 1996)

Fuel price/MWh after boiler 145 143 107 79 81 99 122 130 171

Other costs after boiler 40 40 50 140 120 120 120 120 50

Total after boiler 185 183 157 219 201 219 242 250 221

Cost e€ectiveness of net accumulation of carbon dioxide in the atmosphere

305

Table 7. Costs to substitute fossil fuels with biofuels. SEK/per kg CO2. Basis for comparison: generated thermal energy after boiler in district heating boilers Fossil Fuels/MWh gen. energy

Biofuels/MWh gen. energy Avoided Total costs Fuel costs Emissions Total costs Fuel costs emissions SEK/kg SEK/kg kg CO2 SEK SEK kg CO2 CO2 CO2

Emissions Total costs Fuel costs kg CO2 SEK SEK Fossil gas

Light Fuel Oil

Heavy Fuel Oil

Coal

263

185

318

145

183

359

143

157

500

107

219

79

Bark Sawdust, etc. Logging res. Salixrm Upgraded Bark Sawdust, etc. Logging res. Salix Upgraded Bark Sawdust, etc. Logging res. Salix Upgraded Bark Sawdust, etc. Logging res. Salix Upgraded

2 2

201 219

81 99

261 261

0.06 0.13

ÿ0.24 ÿ0.18

22

242

122

241

0.24

ÿ0.10

16 5 2

250 221 181

130 171 81

247 258 316

0.26 0.14 ÿ0.01

ÿ0.06 0.10 ÿ0.20

2

199

99

316

0.05

ÿ0.14

22

230

130

296

0.16

ÿ0.04

16 5 2

230 231 181

130 171 81

302 313 357

0.16 0.15 0.07

ÿ0.04 0.09 ÿ0.07

2

199

99

357

0.12

ÿ0.02

22

230

130

337

0.22

0.07

16 5 2 2

230 231 181 199

130 171 81 99

343 354 498 498

0.21 0.21 ÿ0.08 ÿ0.04

0.07 0.18 0.00 0.04

22

230

130

478

0.02

0.11

16 5

230 231

130 171

484 495

0.02 0.02

0.11 0.19

(1 US$ = 7.50 SEK; 1996)

not illustrated directly in the table, but the values can be used for indicative conclusions. The methodology can be applied also for speci®c calculations on speci®c situations. The values in Table 7 clearly indicates that avoidance of CO2 emissions can be accomplished at low or even negative costs in cases when biofuels are substituting fossil fuels for heating purposes. For Swedish conditions, the taxes on fuels for generation of thermal energy are principally as follows. (The values are transformed from other units and are here expressed in SEK/kg CO2 emissions based on the carbon content and heat values in the fuels. For comparison with values in Table 7 adjustments to the boiler eciency should be performed.) CO2-tax SEK/kg CO2 in fuel General Energy tax coal light oil

Industry 0.20

± ±

Others 0.40

0.07 0.08

Comments From July 1, 1997 the CO2 tax is doubled for the industry.

heavy oil fossil gas biomass Sulphur tax coal light oil fossil gas heavy oil biomass (NOx-fee)

± ± ± ± ± ±

± 0.05 0.04

± ± ±

0.08 0.09 0.05 0.04 Revolving fund, applicable to all fuels. Refunding related to emissions, in principle, fuel neutral.

When comparing the combined values of the various taxes with the costs in Table 7 it is obvious that there are strong ®nancial driving forces in favour of biofuels in the non-industrial sector (``others''). These have led to a considerable increase in the use of biofuels in that sector. For industry, the incentives have not been that strong. However, the recently enforced doubling of the CO2 tax would, according to the values in Table 7, make biofuel boilers pro®table also within the industrial sector.

306

B. HEKTOR

3.2. Sequestration±reduction of CO2 emissions by increased storage of carbon in vegetation (forests) The cost analyses for accumulation of carbon in forests can be performed for two cases, an increase of carbon in existing forest, and/or by increase of the forest area. Some general characteristics are the same or similar for the two cases. As mentioned above, forests have two interrelated but di€erent roles in the carbon cycle. One is the ®xing of carbon from CO2 in the atmosphere into biomass, and the other is to store carbon in a temporary carbon sink. With increasing age of trees and stands, the buildup processes generally become less e€ective. Ageing of the trees will therefore in time result in the reverse; the decomposition becomes greater than the build-up process. The maximum build-up capacity of a tree is reached earlier than its maximum storage capacity. The general features are more or less self-evident, but data that permit detailed economic calculations of these processes are not readily available. The situation is similar for CO2-accumulation by increase in stand volumes by changed forest management methods, e.g. more intensive silviculture and revised thinning schemes. More information is available for economic analyses of another option, e.g. to change tree species. Spruce is more e€ective both to ®x and to store carbon than pine and birch in most sites used for forestry under the presently applied rotation periods.3 However, generally, spruce is less suitable for long rotations. The methodology for cost analyses for CO2 sequestration by planting new forests on presently non-forested land must take the principal e€ect of the time factor into consideration. If these forest are planted only or primarily for the CO2 sequestration one must bear in mind that the e€ects will culminate after some

years, gradually diminish and then revert to net release of CO2. Thus, the long term e€ects are fundamentally di€erent from the short term e€ects.17 A combined purpose, new forest for new timber markets and for energy generation substituting fossil fuel, would provide a low cost solution of the CO2 emissions. However, in very few cases have the analyses of the climate e€ects of new forest plantations included market and long term utilisation of the plantations. Table 8 presents a calculation example of the e€ects of tree planting of quick growing species with the sole intent of CO2 sequestration within a 20 years perspective. The ®gures indicate that the short (20 years) term costs are in the same order of magnitude as the costs presented in Table 7 for the combustion of biofuels substituting fossil fuels. However, in a longer perspective (more than 20 years), the net sequestration in these plantations will level o€ and increasing costs will occur in order to keep the plantation as a carbon store. The long term costs of CO2 mitigation by the establishment of tree plantations with this sole purpose will therefore be high. In a longer perspective, the planting of trees for the sole purpose of reducing CO2 is a more expensive measure for the mitigation of CO2 emissions than using available biofuels for the substitution of fossil fuels.18 In very advantageous sites where the growth could be high for some years after a successful plantation (FACE 1996) the mitigation costs could match those of some wood fuel examples given in Table 7 above. However, with a longer perspective including also the costs for the maintenance of the carbon sink this sequestration programme will lead to high mitigation cost. Another idea is to adapt the forestry practices in existing production forests in order to mitigate the net emissions of carbon dioxide. Cost assessments on such measures tend to be extremely complex, even in countries like

Table 8. Cost of CO2 mitigation. Sequestration in forest plantations. 20 years. Examples Yield tDS/ha 4/y 10/y 12/y

Sequestration* kg CO2; 20 years

Plantation costs

149,600 374,000 448,800

SEK 4000 SEK 8000 SEK 12000

Capital costs (real, 20 years)

Costs SEK/kgCO2

3%

4%

5%

3%

4%

5%

7224 14,449 21,673

8764 17,529 26,293

10613 21,226 31,840

0.05 0.04 0.05

0.06 0.05 0.06

0.07 0.06 0.07

*Conversion factor: 1 kgDS wood equals 1.87 kg CO2. Thus, for the production of 1 kg dry wood 1.87 kg of carbon dioxide is used. (1 US$ = 7.50 SEK; 1996)

Cost e€ectiveness of net accumulation of carbon dioxide in the atmosphere

Sweden where forestry data have been collected and analysed for a long time. As data and information are not yet sucient for direct calculations, an indirect approach, as the tentative model applied in this paper, may give some indicative results. It is therefore assumed in the following presentation, that forestry, being a mature venture, is adapted to reach an optimum economic result by the application of present methods. That assumption means that changes in and adaptations of these methods will lead to lower return on capital, and obviously in most cases also to lower production. If the changes are aiming at meeting CO2 targets, the costs (in the calculation model) should be charged to the factor ``avoided CO2 emissions''. As the sales of saw logs and pulp wood is the main source of revenue in the present models, the foregone annual revenue in a CO2 adjusted model could be expressed in the same unit, namely SEK/m3 of sold forest products. That price of standing timber for Swedish conditions is on a level of SEK 400/m3. The values in Table 9 are derived from data on the conditions in the South of Sweden, collected and published by the National Swedish Forest Survey. For the biomass assessments, the functions published by Marklund are applied. Applying a typical stumpage price for spruce in Southern Sweden, SEK 400 per cubic metre stem volume, the monetary values of the stand and of the annual growth are appraised. The costs of a prolonged rotation are calculated as the di€erence between the current annual value of the growth and foregone income from alternative investments, at real interest levels of 3, 4, and 5%. These costs are then compared with the e€ects of the sequestration for the same period and are presented in SEK/kgCO2 in Fig. 2.

307

Thus, the costs presented in Table 10 are considerably higher than those for biomass combustion in Table 7. This gives a general indication that for Swedish conditions, an increase of the rotation period to store more carbon in standing trees results in high costs for CO2 mitigation. In analogy with the data in Fig. 2, one could deduce that also a decrease of the rotation period in order to improve the biomass build-up process would result in high CO2 mitigation costs. The reason for that is the high value of the timber which leads to high costs for lost yield and lost return on the capital represented by the trees. Moreover, the option to increase the stored carbon by lengthening of the rotation will provide only a temporary short term solution. In principle the same problems will occur as for the plantation cases. The long term cost will become high. 4. CONCLUSIONS

The use of wood fuels in the form of industrial wood waste, logging residues, etc., in district heating systems and in industry is a cost e€ective way to mitigate carbon. Adjustments of prevailing forest management practices to increase the carbon storage capacity or the biomass build-up capacity are more expensive. Forest plantations with the sole purpose to mitigate CO2 emissions will in the long run turn out to be an expensive mitigation option, even if the short term costs can be low and on the same level as some wood fuel cases. One main conclusion is that forests have two distinctly di€erent roles in the carbon cycle. In the analyses on carbon dioxide emissions those two roles must be distinguished, as they are fundamentally di€erent. The two roles are (1) the process to build up biomass from carbon taken from carbon dioxide in the

Table 9. Annual net growth, stem wood and biomass, and net sequestration of CO2; spruce South Sweden Year Annual net growth, biomass, DS % Annual net growth, stem volume % Annual net sequestration* Ton CO2

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1.03

1.01

0.97

0.93

0.89

0.84

0.78

0.72

0.66

0.60

0.54

1.16

1.14

1.10

1.06

1.01

0.95

0.89

0.82

0.76

0.69

0.62

4.22

4.17

4.08

3.95

3.79

3.60

3.39

3.17

2.93

2.68

2.44

Marklund3, Anon.22 *Conversion factor: 1 kgDS wood equals 1.87 kg CO2. Thus, for the production of 1 kg dry wood 1.87 kg of carbon dioxide is used

308

B. HEKTOR

Fig. 2. Estimated cost of sequestration. Prolonged rotation by 10 years. Southern Sweden. Data from Table 9. Simpli®ed calculations applied due to lack of detailed data.

atmosphere, and (2) to serve as a sink for storage of carbon. However, the two roles are not independent of each other. Attempts to maximise the storage of carbon will negatively in¯uence the build-up process, and vice versa. In forestry it is regarded as a common knowledge, that the forests have these two functions; the combination of production means and product. Comparisons with other loops in the forestrelated carbon cycle have not been elaborated on in this paper. However, in analogy with the analyses of biofuel loops it seems reasonable to assume that both the paper/waste paper loop and the wood/wood product loop would contain options for cost e€ective chains with regard to mitigation of CO2 emissions. The key issue here is for what does the wood product substitute, and with what eciency? REFERENCES 1. Anon., Forest absorbing carbon dioxide emissions. Annual reports. FACE Foundation, Arnhem, The Netherlands, 1993, 1995. 2. Eriksson, H., Sources and sinks of carbon dioxide in Sweden, Ambio, 1991, 20(34), 151±155. 3. Marklund, L. G., Biomassefuntioner foÈr gran, tall och bjoÈrk. (English summary) (Biomass functions for spruce, pine and birch), Department of Forest Survey, Swedish University for Agricultural Sciences, 1989. 4. Eriksson, L., LoÈnsammare skogsskoÈtselstrategi i smaÊskogsbruket. (More pro®table forest managment in private small-scale forestry) Kungl. Skogs-och Lantbruks-akademins Tidskrift v. 135 (10) 1996. 5. Eriksson, H. and Hallsby, G., Biomass fuelsÐe€ects on the carbon dioxide budget. NUTEK R, 1992:10. 6. RoseÂn, K., SkoÈrd av skogsbraÈnslen i slutavverkning och gallring. (E€ects of harvesting of forest fuels in ®nal felling and thinning), Swedish Board of Forestry, 1991.

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