Bioenergy is a significant source of renewable energy in the U.S. and internationally. We explore whether creation of localized bioenergy markets near existing military installations in the southeastern U.S. could simultaneously address military renewable energy generation objectives while reducing urban encroachment. We model the use of public-private partnerships to stimulate the creation of these markets, in which stable installation demand is paired with stable supply from surrounding landowners. We employ two economic models - the SubRegional Timber Supply (SRTS) model and the Forest and Agricultural Sector Model with Greenhouse Gases (FASOMGHG) - to assess how markets influence forest and agriculture land use, renewable energy production, and greenhouse gas (GHG) mitigation at the regional and national levels. When all selected installations increase bioenergy capacity simultaneously, we find increased preservation of forest land area, increased forest carbon storage in the region, and increased renewable energy generation at military installations. Nationally, however, carbon stocks are depleted as harvests increase, increasing GHG emissions even after accounting for potential displaced emissions from coal- or natural gas-fired generation. Increasing bioenergy generation on a single installation within the southeast has very different effects on forest area and composition, yielding greater standing timber volume and higher forest carbon stock. In addition to demonstrating the benefits of linking two partial equilibrium models of varying solution technique, sectoral scope, and resource detail, results suggest that a tailored policy approach may be more effective in meeting local encroachment reduction and renewable energy generation objectives while avoiding negative GHG mitigation consequences. (C) 2016 Elsevier Ltd. All rights reserved.