Is forest sequestration at the expense of bioenergy and forest products cost-effective in EU climate policy to 2050?

Forest management affects the quantity of CO2 emissions in the atmosphere by carbon sequestration in standing biomass, carbon storage in forest products and production of bioenergy that replace fossil fuels. The main question in this paper is whether forest sequestration is worth increasing at the expense of bioenergy and forest products to achieve EU’s emission reduction target to 2050 cost-effectively. The assessment is based on numerical calculations using a dynamic, partial equilibrium model of cost-effective solutions, where three abatement methods in the forest sector are included together with abatement in the fossil fuel sector. The results show that forest sequestration in standing biomass is cost-effective compared to bioenergy. When sequestration is taken into account, net present costs for meeting EU carbon targets can be reduced by 18%. This is achieved through an increase in annual carbon sequestration by 30-158 million ton CO2. The overall cost of reaching the 80 per cent carbon reduction target amounts to 2,002 billion Euros when sequestration is included in the policy, but increases to 2,371 billion Euros without sequestration. Results suggest that forests can serve as a cost-efficient carbon sink over the considered time period.