CO₂ is the most important greenhouse gas; wood is a carbon-neutral fuel in that burning releases CO₂ (the same amount as if the trees died and rotted) but new trees absorb it. Growing trees absorb more CO₂ than mature trees, so as we harvest mature trees, from a climate change perspective, it is essential that we replace them with new ones. Wood is a renewable resource that provides a habitat for wildlife. It also has a good energy balance, i.e. can be locally produced, requiring very little processing or transport energy (logs more so than pellets, although pellets release less of the pollutants that cause acid rain).
Emissions are better than coal, oil or gas as regards NOx and SOx (acid rain) and carbon monoxide but worse for particulates. For space heating, emissions and energy losses from power stations make electricity the worst option environmentally; and wind and photovoltaics are as yet too expensive for heating.
Modern ‘clean burn’ stoves can be used in smokeless zones; they use secondary combustion, baffles or catalyts to maximise combustion of gases and particulates, reducing emissions and increasing efficiency.