Substitution between coal and wood in Europe
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This paper considers the effects of CO2 emission trading system on the
substitution between coal and energy wood in the large scale heat and power
production in Europe. We use a technology-based approach where the
substitution between coal and wood takes place through switch from one
technology to another over time. The analysis is conducted with the
EUFASOM (European Forest and Agricultural Sector Optimization Model).
Our results suggest that the CO2 emission trading system gives incentives
for heat and power plants to increase energy wood demand in the limits of
energy wood potential.