Integrating Carbon Price Trajectories Into Canadian and California Forest Sector Mitigation Scenarios

English Abstract:

Forest policies in Canada and California are increasingly interlinked through the wood products trade as well as evolving integration between state and provincial carbon markets. While California only has 2% as much forest area as Canada, it has more end-users of wood products. Our goal is to use a rigorous systems perspective for both wood exporting regions and wood importing regions. We add price driven scenarios to recent forest management and product utilization scenarios developed with the Carbon Budget Model of the Canadian Forest Sector (CBM-CFS3) and a harvested wood products (HWP) model. In addition, we develop plot based yield curves for California’s forests to simulate the same scenarios for Canada and California.The first scenario is an increase in the global-level adoption of the current methane capture practices common to the upper quartile of the European Union’s economies. The second is the substitution of bioenergy for the most polluting, rather than the average polluting, units of energy in regional energy grids. The third is the reallocation of a greater percentage of the chip-based harvest from paper products to engineered wood products. For California, we add an additional forest management option based on silvicultural thinning to reduce mortality in water limited Mediterranean climate forests. We then test whether increasing carbon price trends change the relative rank order of scenarios in terms of cumulative mitigation impacts as carbon pollution in later years will be more expensive per ton than carbon pollution in the earlier years. We use the social cost of carbon from William Nordhaus’s DICE2013 model that starts at $17.7 per tCO2e in 2015 and increases 3% annually. We then explore situations where increasing carbon prices drive a more rapid diffusion of best current technologies that could significantly improve overall mitigation benefits.