Economic Impacts of Expanded Woody Biomass Utilization for Electric Power Generation in Florida

This chapter evaluates the potential impacts on the Florida economy of substituting woody biomass fuels for fossil fuels to generate electricity. The analysis uses a computable general equilibrium (CGE) model coupled to an Input-Output/Social Accounting Matrix (IO/SAM), representing the Florida economy in 2007. At a biomass supply of 40 million tons (green basis), representing approximately 13 percent of the energy needs for current electric generation in Florida, GDP would increase 0.32 percent (US$2.2 billion) above the current level. The forestry sector output would increase 69 percent above the base to meet new demands for woody biomass fuels, while the electric power sector output would decrease 0.33 percent and the forest products manufacturing sector output would decrease 6.7 percent due to higher costs for woody biomass fuels. Prices for timber would increase by up to 43 percent if the economic model were modified to limit capital investment and disaggregate timber production and logging/forestry support services. Annual imports of fossil fuels would decrease 2.5 percent ($1.14 billion). The policies and incentives for bioenergy development could have an overall positive impact on Florida's economy. Overall, the forestry sector would benefit from increased demand and prices.