Using wood products to mitigate climate change: External costs and structural change

In this study we examine the use of wood products as a means to mitigate climate change. We describe the life cycle of wood products including forest growth, wood harvest and processing, and product use and disposal, focusing on the multiple roles of wood as both material and fuel. We present a comparative case study of a building constructed with either a wood or a reinforced concrete frame. We find that the production of wood building material uses less energy and emits less carbon than the production of reinforced concrete material. We compare the relative cost of the two building methods without environmental taxation, under the current Swedish industrial energy taxation regime, and in scenarios that incorporate estimates of the full social cost of carbon emission. We find that the inclusion of climate-related external costs improves the economic standing of wood construction vis-a-vis concrete construction. We conclude that policy instruments that internalise the external costs of carbon emission should encourage a structural change toward the increased use of sustainably produced wood products.