THE ROLE OF FORESTRY IN CLIMATE CHANGE AND SUSTAINABLE ENERGY PRODUCTION - Economics of Sustainable Energy in Agriculture - page 138

would replace an average of 2.45 Gt C per year. This figure is based on 7 t
while the average C capture rate can vary from less than 0.5 to
12 t C depending on the type of forestry being practiced -
conventional or plantation. This amounts to some 40% of global fossil fuel
emissions of carbon in 1990.
In Canada, the high capital cost of infrastructure, regulation of the
electricity market, and the relatively low cost of fossil fuels restrict the
economic viability of substituting biomass for fossil fuels in power
generation. When we consider global climate change, future energy
requirements, availability of supply, and social and environmental values,
we find that the benefits of renewable energy sources such as wood
biomass outweigh the costs in some, but not all situations.
4. ECONOMIC INSTRUMENTS AND INSTITUTIONS:
RESPONSE TO MARKET FAILURE IN FORESTRY
One response to the failure of forest management to account for carbon
storage and flux (or market failure) has been to increase emphasis on
multiple use management, and even more recently on forest ecosystem
management. While managing for multiple use is commonly understood
and accepted by foresters, the same cannot be said about ecosystem
management (Sedjo 1996). The problem is that it is not at all clear what the
objectives of ecosystem management might be - they are vague and ill
defined - and there is no way of knowing when objectives are achieved.
This makes scientific management difficult if not impossible.
In order to get firms to harvest forest stands at times that confer the
greatest benefits to society, it is possible to harness the power of the market
(or competition) via taxes and subsidies, and through the use of tradeable
carbon (emission and uptake) permits. In practice, governments have
eschewed this approach, preferring instead to rely on control - regulation
or direct ownership, or a combination of these.
In the past decade, many countries have implemented new forest
acts that have included forestry regulations of one form or other (see
Wilson et al. 1999). Both Finland and Sweden have new forest acts meant
to protect nature. However, the most onerous and detailed regulations have
been implemented in British Columbia through the Forest Practices Code
of 1994, perhaps surprisingly, as BC also has the highest public ownership
of forestland of any jurisdiction (see Wilson et al. 1999). Countries have
also put in place harvest restrictions, particularly by setting aside
environmentally important ecosystems. While the purpose of set asides is
to protect biodiversity, they also constitute a massive carbon sink (although