The Global Impacts of Biofuel Mandates

The rise in world oil prices, coupled with heightened interest in the abatement of greenhouse gas emissions, led to a sharp increase in biofuels production around the world. Previous authors have devoted considerable attention to the impacts of these policies on a country-by-country basis. However, there are also strong interactions among these programs, as they compete in world markets for feedstocks and ultimately for a limited supply of global land. In this paper, we offer the first global assessment of biofuel programs Ð focusing particularly on the EU and US. We begin with an historical analysis of the period 2001-2006, which also permits us to validate the model. We then conduct an ex ante analysis of mandates in the year 2015. We find that if these mandates are indeed fulfilled the impact on global land use could be substantial, with potentially significant implications for greenhouse gas emissions.

[1]  K. R. Pearson,et al.  Computing solutions for large general equilibrium models using GEMPACK , 1996 .

[2]  Timothy D. Searchinger,et al.  Estimating Greenhouse Gas Emissions from Soy-based US Biodiesel when Factoring in Emissions from Land Use Change , 2008 .

[3]  Thomas W. Hertel,et al.  Calibration of a Land Cover Supply Function Using Transition Probabilities , 2009, GTAP Research Memoranda Series.

[4]  Wallace E. Tyner,et al.  Introducing Liquid Biofuels into the GTAP Data Base , 2007, GTAP Research Memoranda Series.

[5]  Thomas W. Hertel,et al.  Global Agricultural Land Use Data for Climate Change Analysis , 2008, GTAP Working Paper.

[6]  K. Pearson,et al.  Decomposing Simulation Results with Respect to Exogenous Shocks , 2000 .

[7]  Joe L. Outlaw,et al.  Potential for biofuel-based greenhouse gas emission mitigation: rationale and potential. , 2005 .

[8]  N. Ramankutty,et al.  Farming the planet: 2. Geographic distribution of crop areas, yields, physiological types, and net primary production in the year 2000 , 2008 .

[9]  Roman Keeney,et al.  Assessing Global Computable General Equilibrium Model Validity Using Agricultural Price Volatility , 2007 .

[10]  T. Hertel,et al.  Assessing Global CGE Model Validity Using Agricultural Price Volatility , 2005 .

[11]  Huey-Lin Lee,et al.  An Integrated Global Land Use Data Base for CGE Analysis of Climate Policy Options , 2008 .

[12]  Martina Brockmeier,et al.  A Graphical Exposition of the GTAP Model , 2000, GTAP Technical Paper Series.

[13]  Jacinto F. Fabiosa,et al.  Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change , 2008, Science.

[14]  S. Polasky,et al.  Land Clearing and the Biofuel Carbon Debt , 2008, Science.

[15]  Roman Keeney,et al.  The Indirect Land Use Impacts of United States Biofuel Policies: The Importance of Acreage, Yield, and Bilateral Trade Responses , 2009 .

[16]  Roman Keeney,et al.  How Confident Can We Be in Cge-Based Assessments of Free Trade Agreements? , 2004 .

[17]  Dileep K. Birur,et al.  Biofuels and their By-Products: Global Economic and Environmental Implications , 2010 .

[18]  Channing Arndt,et al.  Implementing Systematic Sensitivity Analysis Using GEMPACK , 2000, GTAP Technical Paper Series.

[19]  B. Sohngen,et al.  Global Forestry Data for the Economic Modeling of Land Use , 2008, GTAP Working Paper.

[20]  Huey-Lin Lee,et al.  Modeling Land-use Related Greenhouse Gas Sources and Sinks and their Mitigation Potential , 2008, GTAP Working Paper.

[21]  Robert N. Stavins,et al.  Land-Use Change and Carbon Sinks: Econometric Estimation of the Carbon Sequestration Supply Function , 2005 .

[22]  Dileep K. Birur,et al.  Impact of Biofuel Production on World Agricultural Markets: A Computable General Equilibrium Analysis , 2007, GTAP Working Paper.

[23]  A. Tabeau,et al.  Will EU biofuel policies affect global agricultural markets , 2008 .

[24]  Alan A. Powell,et al.  THE CONSTANT ELASTICITY OF TRANSFORMATION PRODUCTION FRONTIER AND LINEAR SUPPLY SYSTEM , 1968 .

[25]  N. Ramankutty,et al.  Farming the planet: 1. Geographic distribution of global agricultural lands in the year 2000 , 2008 .

[26]  Bas Eickhout,et al.  The Impact of Environmental and Climate Constraints on Global Food Supply , 2008, GTAP Working Paper.

[27]  M. Espey.  Gasoline demand revisited: an international meta-analysis of elasticities , 1998 .

[28]  Bruce A. Babcock,et al.  Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets , 2007 .

[29]  Paul V. Preckel,et al.  Sensitivity analysis revisited: A quadrature-based approach , 1997 .