Economics

Economics Collage

From a strictly economic perspective and based on current market conditions, whether the United States chooses to embrace an alternative energy future or continues to rely on non-renewable fossil fuels is largely a matter of political/social choice. At the present time, 2006, it is clear that forest bioenergy resources in general (except for a few special cases) cannot economically compete with fossil fuels. As a result, cost remains one of the major barriers to bioenergy development (GAO 2005). However, forest bioenergy offers a variety of environmental and social benefits to society. Without doubt, forest bioenergy will become increasingly more competitive as its production cost is further reduced with the advances of biomass production and energy conversion technologies, as the prices of fossil fuels continue to rise, and as the incentive programs to account for its environmental and social values are developed.

This section of the Encyclopedia of Southern Bioenergy will synthesize what we know about the economics of forest bioenergy products. Yet, economic issues are interrelated with other issues associated with Forest Management for bioenergy production, biomass Harvesting and Utilization, and Environmental Sustainability of producing forest bioenergy products. Though the economic aspects of these non-economic issues are incorporated in this section, detailed discussion on the non-economic issues can be found in other sections of this encyclopedia.

Specifically, this economics section presents the status of bioenergy products availability and use in the Southern United States with some additional material offering national and international perspectives. Much of the data and information in this section is time sensitive. Our synthesis reflects the situation as it exists circa 2006 and focuses on:

• Supply of Forest Biomass: Availability and location of forest biomass
• Cost Competitiveness: Costs of producing feedstock and bioenergy products from forests as compared to other energy sources 
• Community Impacts: Employment and income impacts on local communities, including case studies 
• Policy Factors and Incentives: Policies and incentive programs that currently exist and would be needed to make forest bioenergy competitive
• Landowner Economics: There are several economic benefits related to biomass and bioenergy production that can be potenially realized by private forest landowners.