9.6.4 Policies to increase substitution of forest-derived biofuels for fossil fuels and biomass for energy-intensive materials

Countries may promote the use of bioenergy for many non-climate reasons, including increasing energy security and promoting rural development (Parris, 2004). Brazil, for example, has a long history of encouraging plantation establishment for the production of industrial charcoal by offering a combination of tax exemption for plantation lands, tax exemption for income originating from plantation companies, and deductibility of funds used to establish plantations (Couto and Betters, 1995). The United States provides a range of incentives for ethanol production including exclusion from excise taxes, mandating clean air performance requirements that created markets for ethanol, and tax incentives and accelerated depreciation schedules for electricity generating equipment that burn biomass (USDOE, 2005). The Australian Government’s Mandatory Renewable Energy Target, which seeks to create a market for renewable energy, provides incentives for the development of renewable energy from plantations and wood waste (Government of Australia, 2006).

Building codes and other government policies that, where appropriate, can promote substitution of use of sustainably harvested forest products wood for more energy-intensive construction materials may have substantial potential to reduce net emissions (Murphy, 2004). Private companies and individuals may also modify procurement to prefer or require certified wood from well-managed forests on environmental grounds. Such efforts might be expanded once the climate mitigation benefits of sustainably harvested wood products are more fully recognized.