Abstract Forests and the resources they offer have been important for the Swedish economy for a long time, and the forest industry remains a large part of the manufacturing industry even as the economy is becoming more service-based. Forests are also increasingly seen as an important source of biofuels that can be used to reduce the reliance on fossil fuels and to reach the target for a carbon neutral economy by the year 2050. Additionally, the preservation of forests for their various ecosystem services remains high on the political agenda. This thesis examines important economic issues of ecosystem services and bioenergy from forests as well as the goal conflicts within forestry in Sweden in four separate papers. The aim is to contribute to the research on optimal social use of Sweden’s forests and the future of forestry when considering ecosystem services and the trade-off between demands for different forest products. This is particularly important since Sweden is moving towards a circular bio-economy where forests are becoming increasingly important as a fuel and material source. The first paper presents the current state of ecosystem service valuation and the challenges that needs to be addressed in the field when moving forward. The second paper applies the methodology of benefit transfer in a spatially explicit context to provide maps of ecosystem services for Sweden. The results are reasonable compared to previous estimations and the main contribution is the mapping of the spatial distribution of carbon sequestration and recreation in Sweden. The third paper focuses on the market for biomass and examines the elasticity for demand for the different sectors that uses forest biomass as an input. The findings are that the pulp and heating sectors are more sensitive towards price changes, while sawmills would to a larger extent be able to transfer increasing costs to their customers. This is in line with the expected outcome that as demand for biofuels increase, the heating sector would compete for biomass mainly with the pulp sector, rather than the sawmill industry. The fourth paper examines the effect of internalizing carbon sequestration on the rotation periods of forests in Sweden, as well as the effect of increased biofuel production. The results are that internalizing carbon sequestration would lengthen rotation periods, but there are large regional differences, and a carbon price that would barely increase rotation in southern Sweden may lead to infinite rotations in northern Sweden.  This thesis recommends joint optimization of ecosystem services with market values but recommends against paying forest-owners for the carbon their forests sequester. While carbon storage would increase, a large part of the money would go towards paying for sequestration that already would occur in absence of the payment for ecosystem services scheme. Additionally, it would be difficult to price the subsidy/tax on a level that extends rotation in all the country without it leading to infinite rotation periods in any parts of the countries, which would have dramatic effects for the local forest industry. The goal conflicts within the Swedish forest sector needs to be examined further, going forward. This thesis touch upon the complexity with some of these goal conflicts, both between industry such as the pulp and heating sectors, but also between the environmental goals of “Sustainable Forests” and “Reduced Climate Impact”, as well as with recreational uses of forests. There is certainly potential for synergy in some cases, the fourth paper showed favorable outcomes when optimizing for timber, biofuels and carbon sequestration, but Payments for Ecosystem Services schemes are expensive and may not be the most efficient use of taxpayer money.