The use of wood for electricity generation and heat in modern (non-traditional) technologies has grown rapidly in recent years. For its supporters, it represents a relatively cheap and flexible way of supplying renewable energy, with benefits to the global climate and to forest industries. To its critics, it can release more greenhouse gas emissions into the atmosphere than the fossil fuels it replaces, and threatens the maintenance of natural forests and the biodiversity that depends on them. Like the debate around transport biofuels a few years ago, this has become a highly contested subject with very few areas of consensus. This paper provides an overview of the debate around the impact of wood energy on the global climate, and aims to reach conclusions for policymakers on the appropriate way forward.