Browsing by Subject "päästökerroin"

In this master thesis an economic model is constructed to describe an optimal use of mires from a land-use perspective. Climate effect of a peat is explored from a life-cycle perspective and economic factors like discount rate and costs are taken into account. Peat supply chains differ from each other depending on initial land-use and after-use alternative. First a model is constructed to describe the private optimum. Then a model is constructed to describe the social optimum in which externalities are internalized. Finally environmental management instruments are examined. Special attention is drawn to an effective emission factor. Examination is divided to analytical and numerical part. Derived efficient emission factor consists of two parts: the emission factor of peat combustion and amendment factor, which takes into account the emissions/sinks of initial peatland, peat extraction field and after-use alternative as well as time horizon, discount rate and peat extraction rate. The efficient emission factor is a declining function of emissions per hectare of mire and an increasing function of emissions of after-use, peat extraction field and combustion. The discount factor used in the efficient emission factor is a declining function of discount rate and production period. The efficient emission factor increased as a function of discount rate when emissions per hectare of mire were higher than emissions of after-use alternative. Increase of extraction period increased the efficient emission factor in the case of every peat extraction chain apart from those chains in which the initial peatland was especially great source of emissions. According to the results the efficient emission factor was larger than the emission factor of coal when peatland was initially natural mire or forestry-drained mire, which was insignificant source of emissions. Instead the efficient emission factor was lower than the emission factor of coal when peatland was initially forestry-drained mire, which was significant source of emissions or cultivated peat soil.!According to the results, when peatland was initially natural mire the efficient emission factor was on an average approximately 6 % higher than peat emission factor and 20 % lower than coal emission factor. Respectively the efficient emission factor was on an average approximately 4 % lower than peat emission factor and 8 % higher than coal emission factor when peatland was initially forestry-drained mire and 23 % lower than peat emission factor and 13 % lower than coal emission factor when peatland was initially cultivated peat soil. Application of the efficient emission factor involves many challenges. Biggest challenges may link to inadequate and uncertain emission data. A lot of additional resource is needed related to climate effects of different land-use and mire types in order to use the efficient emission factor in practice. It could also be quite problematic that the after use alternative should be fixed when the extraction in the area begins so that the efficient emission factor could be defined. It is also difficult to choose which discount rate to use. Additionally, it was explored how different kind of shocks affects socially optimal use of fuel. The results of an analytical examination were hard to interpret in most cases. Instead with the help of numerical examination it was possible to draw clearer conclusions of how the shocks affected the optimal use of fuel. Based on the results of the examination the use of peat increased and the use of coal decreased as the function of social cost of carbon when the efficient emission factor was lower than the emission factor of coal. According to the analytical examination, increase of discount rate decreased the use of peat and increased the use of coal when the net benefit of after-use was larger than the net benefit of alternative use of peatland. This is the case because the greater the discount rate is the less significant is the importance of after-use. According to the numerical analysis the increase of discount rate decreased the use of peat and increased the use of coal in all production chains. Also according to the numerical analysis, the use of peat decreased and the use of coal increased as a function of production period in all production chains. Instead opposite happened when the peat extraction rate increased. Thus it can be said that faster the peat can be extracted, more peat is used. At the same time the use of coal is decreased.