Land Use Change from Biofuels Derived from Forest Residue: A Case of Washington State

Biofuel policy in the United States is transitioning away from corn towards second-generation biofuels in part because of the debate over environmental damages from indirect land use change. We combine a spatially explicit parcel level model for land use change in Washington State with simulations for biofuel policy aimed at utilizing forest residue as feedstock. Using a spatially explicit model provides greater precision in measuring net returns to forestland and development and indicates which areas will be most impacted by biofuel policy. The effect of policy is simulated via scenarios of increasing net returns to forestry and of siting feedstock-processing plants. Our results suggest that forestland will increase from such a policy, leading to a net reduction in atmospheric carbon from indirect land use change. This is in contrast to the experience of corn ethanol where the change in carbon emissions is potentially positive and large in magnitude.