Global forest carbon leakage and substitution effect potentials: The case of the Swedish forest sector

Schulte, M., Lauri, P., Di Fulvio, F. ORCID: https://orcid.org/0000-0002-7317-6360, Forsell, N., Derci Augustynczik, A.L., Eggers, J., Hahn, T., & Jonsson, R. (2025). Global forest carbon leakage and substitution effect potentials: The case of the Swedish forest sector. Journal of Environmental Management 393 e127193. 10.1016/j.jenvman.2025.127193.

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Abstract

The forest sector's climate change mitigation depends on forest carbon sequestration, storing carbon in wood products, and avoidance of fossil greenhouse gas emissions by replacing more emission intensive products or energy sources, i.e., the substitution effect. In addition, market responses to changes in wood supply following altered forest management by one region induce climate relevant changes in form of compensatory roundwood harvest outside the region, and thus forest carbon leakage. This study presents a global climate change mitigation assessment of the forest sector, accounting for market-effects leakage. We use a global forest sector model, wood flow analysis and life cycle inventory data to assess the impact of forest management changes on climate change mitigation, with a focus on Sweden. Results suggest decreased wood harvesting causes global net climate change mitigation until 2070, despite forest carbon leakage, forgone wood product carbon storage and forgone substitution effect potentials. Increasing domestic wood removals induces global additional emissions until 2100. Additional domestic wood product consumption is climate beneficial which however depends on substitution effects actually materializing. Roundwood harvest leakage ranges from 40 % to 60 % and forest carbon leakage from 50 % to 80 %. Leakage effects occur mainly in North America and Asia, with a gradual shift towards Latin America over time. To further the climate benefit, drivers of growing demand should be addressed and measures be implemented which promote more efficient and sustainable use of wood as a resource. Only concerted global forest policy cooperation would avoid leakage and with that result in improved global climate change mitigation.

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