Protecting the forest from the trees: the social costs of energy production in Sweden

This paper addresses the current debate over the expansion of biomass-based fuels. Using full social cost analysis, we estimate production and environ mental costs for various forest residue, coal, oil, and natural gas energy production systems, using Sweden as our case example. We aggregate and comp are these costs to assess energy policy options. Our analysis indicates tha t while forest residues may constitute a reasonable replacement for coal, n atural gas remains the dominant energy choice in Sweden in terms of combine d economic and environmental costs. Our analysis also demonstrates the site specificity of environmental cost estimation, and the difficulty in moneti zing all environmental impacts. (C) 2001 Published by Elsevier Science Ltd.