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 environmental costs for various forest residue, coal, oil, and natural gas energy production systems, using Sweden as our case example. We aggregate and compare these costs to assess energy policy options. Our analysis indicates that while forest residues may constitute a reasonable replacement for coal, natural gas remains the dominant energy choice in Sweden in terms of combined economic and environmental costs. Our analysis also demonstrates the site specificity of environmental cost estimation, and the difficulty in monetizing all environmental impacts.