2 Answers

I used to take raw wool, directly from the shorn sheep, and use it for mulch around my rose bushes.  Many are marginally hard to the temperatures of our winters here in S.E. New England (RI, USA), and this would protect them.  I did this as a trial during a year that the value of wool was extra low.  When the spring came, I would remove it and pile until my vegetable seedlings were planted and it protected them from the cold at early spring, then heat and weeds of summer.  I was going to begin a marketing campaign and call it "Wolly Mulch", perhaps selling it by the bag.  (yes sir, yes sir, 3 bags full)   Anyway, I gave a bunch to a local University, as my friend worked on their grounds crew.  To this day, the people walking around the city wonder what the white stuff was on the rose plants!  The main drawback I found, it took longer to compost, and when garden was tilled, it got entangled in tines of the tiller and was a problem.  The real benefactors were the rose bushes, vegetables, and the birds.  They loved to raid it and feather their nests to insulate and protect their young! 

Would bay trees suffer from low temperatures?

I have two that have survived minus 10 deg. Centigrade on several occasions.