Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2019:12: Efficient and sustainable bioenergy production in Swedish forests – a network DEA approach

Wenchao Zhou (), Moriah Bostian (), Rolf Färe , Shawna Grosskopf and Tommy Lundgren ()
Additional contact information
Wenchao Zhou: CERE - the Center for Environmental and Resource Economics
Moriah Bostian: Lewis & Clark College, USA
Rolf Färe: Department of Economics, Oregon State University
Shawna Grosskopf: CERE - the Center for Environmental and Resource Economics
Tommy Lundgren: CERE - the Center for Environmental and Resource Economics

Abstract: Forest fuel defined as branches and tops (GROT) of harvested trees represents a large share of forest biomass and is increasingly viewed as a potential energy source. This study assesses the economic potentials of forest bioenergy production in Swedish forests, using a network data envelopment analysis (DEA) model to estimate the technology for biofuel and other forest products. We consider that forests are managed to use multiple inputs to produce multiple outputs. Outputs include sawtimber, pulpwood, fuelwood, and bioenergy in terms of GROT. Our model also considers environmental concerns over biodiversity and CO2 emissions from burning biomass. We apply the network DEA model to measure the revenue efficiency of forest production of Swedish forests using a panel consisting of 20 counties and covering the years from 2008 to 2014. Our results show that there exist persistent economic inefficiencies of forest production in some counties, reducing the overall efficiency of Sweden’s forest and wood products industry. In addition, we also estimate the potential increase in bioenergy, deadwood and CO2 emissions reduction from combustion of bioenergy and by-products from sawtimber and pulpwood.

Keywords: Climate; Bioenergy; Efficiency; Environment; Forests; Network

JEL-codes: D20; D21; D22; D24

24 pages, October 3, 2019

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