Journal of Forest Economics > Vol 19 > Issue 4

Combining an inter-sectoral carbon tax with sectoral mitigation policies: Impacts on the French forest sector

Sylvain Caurla, INRA, UMR 356 Économie Forestière, F-54000 Nancy, France, sylvain.caurla@nancy-engref.inra.fr Philippe Delacote, INRA, UMR 356 Économie Forestière, F-54000 Nancy, France, Franck Lecocq, Agroparistech, Engref, Laboratoire d'économie Forestière, F 54000 Nancy, France, Julien Barthès, Office National des Forêts, F-67340, Ingwiller, France, Ahmed Barkaoui, INRA, UMR 356 Économie Forestière, F-54000 Nancy, France,
 
Suggested Citation
Sylvain Caurla, Philippe Delacote, Franck Lecocq, Julien Barth├Ęs and Ahmed Barkaoui (2013), "Combining an inter-sectoral carbon tax with sectoral mitigation policies: Impacts on the French forest sector", Journal of Forest Economics: Vol. 19: No. 4, pp 450-461. http://dx.doi.org/10.1016/j.jfe.2013.09.002

Published: 0/12/2013
© 0 2013 Sylvain Caurla, Philippe Delacote, Franck Lecocq, Julien Barthès, Ahmed Barkaoui
 
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Keywords
JEL Codes:L52Q23Q42Q54
Forest sector modelingMitigation policiesFuelwoodCarbon storageBiomass energyCarbon tax
 

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In this article:
Introduction
Literature review
Materials and methods
Results
Discussion and conclusion

Abstract

As France works out its plan to tackle climate change issues, questions are arising in the forest sector as to how sectoral mitigation programs such as those designed to enhance fuelwood consumption or to stimulate in-forest carbon sequestration may coincide with an inter-sectoral program such as an economy-wide carbon tax. This paper provides insights into this question by exploring the impacts of (1) a combination of a carbon tax and a fuelwood policy, and (2) a combination of a carbon tax and a sequestration policy on (i) the economy of the forest sector, and (ii) the dynamics of the forest resource. To do this, we used a modified version of the French Forest Sector Model (FFSM) and carried out simulations on a 2020 time horizon. Basing our analysis on the fuelwood sector, we showed that wood producers always benefit from the combination of a carbon tax with either a fuelwood policy or a sequestration policy at the national level. Conversely, and although it favors wood products instead of non-wood substitutes, a carbon tax always decreases consumer surpluses by increasing wood product prices. As a consequence, the combination of a carbon tax with sectoral policies is likely to raise questions about the political economy of the mitigation program. This is particularly true in the case of a combination of a carbon tax with a sequestration policy, which already decreases consumer surpluses. We eventually showed that by increasing transport costs between domestic regions, the carbon tax reallocates production patterns over French territory which could lead to the necessity of a regional breakdown of policy-mixes in the forest sector.

DOI:10.1016/j.jfe.2013.09.002