Analysis of the global wood‐chip trade's response to renewable energy policies using a spatial price equilibrium model

Abstract

AbstractWood chip, mainly used to produce paper and other products traditionally, has also been used to produce biofuel. The global demand for wood chip is increasing as policies promote the use of biomass for renewable energy. The USA has been a major exporter of wood chip worldwide, but US exports of wood chip could decline if this resource is increasingly used for domestic electricity generation and cellulosic biofuel production. Meanwhile, European Union (EU) demand for wood chip is expected to increase rapidly in response to its renewable energy policy. In this paper, we build the first global trade model for wood chip using available wood chip trade data and analyze the combined effects of local renewable energy policies in these jurisdictions on the global market of wood chip. We find that the tropical regions of Latin America and Southeast Asia as well as the Former Soviet Union would increase their export of wood chip significantly in response to the policy scenarios. If forest governance in some of these countries is weak, US and EU renewable energy policy could inadvertently exacerbate deforestation in these regions, with an associated negative impact on carbon storage and other environmental services. © 2017 Society of Chemical Industry and John Wiley & Sons, Ltd