Biomass Energy Use to Reduce Climate Change: A General Equilibrium Analysis for Austria

Abstract A further increase in biomass energy supply is a crucial future option for reducing the Austrian contribution to climate change. Analysis of it has so far focused mainly on supply potentials and costs of production. Increased biomass energy supply, however, is also connected to economy-wide effects and to feedback effects on its own demand. This paper quantifies such effects in a general equilibrium framework of the Austrian economy for different supply scenarios. Increases in biomass energy are shown, for example, to cause substantial changes in the necessary CO 2 tax rate to reach a given emission objective level.

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