Brian McCammon of the 5AT group has written several papers on steam loco fuels and emissions including one titled "Review of Carbon Neutral Fuels with Potential for Use in Modern Steam Locomotives" which outlines the advantages and disadvantages of a wide range of potential fuel types, concluding that compressed woodchip is probably the greenest and most viable bio-fuel for steam locomotive use.
Both Jamie Keyte and Chris Newman contributed papers to the Oct 2009 issue of the New Zealand Solar Action Bulletin on "Sustainable Railways" (guest edited by Brian McCammon) describing possible roles for steam in a "sustainable" rail system, and comparing the cost of wood-fuelled steam operation with both electric and diesel in 2009, projected out to 2029. The full bulletin can be downloaded from this site (click here) as can Jamie's paper. Chris Newman wrote two papers, one titled "Could there be a place for Steam Traction for Rail Transport in a 'Sustainable Energy' World?" and the other titled "Considerations relating to costs of 'Sustainable' Railway Traction Options".
It may be noted that Newman concluded that whilst modern steam traction does not appear to be competitive with diesel in a 2009 Western world commercial environment, that given a substantial rise in oil prices (as can be expected as fossil fuels become depleted) modern steam could easily become competitive on lightly trafficked rural railways. Taking for example a conservative scenario where bio-diesel price is twice that of fossil diesel in 2009, and where wood pellet prices is only 50% higher, the ownership cost of steam traction becomes similar to that of diesel.
Note: in another paper titled "Feasibility of Steam Traction of Coal Transportation in Developing Countries" (published in the proceedings of the CORE2008 Conference on Railway Engineering held in Perth, Western Australia in 2008), Newman demonstrated that even at 2009 prices, steam traction can be highly competitive with both diesel and electric traction in developing countries with low labour costs.