Challenge of biofuel: filling the tank without emptying the stomach? (original) (raw)

The Social Costs and Benefits of Biofuels: The Intersection of Environmental, Energy and Agricultural Policy

Applied Economic Perspectives and Policy, 2010

The efficacy of alternative biofuel policies in achieving energy, environmental and agricultural policy goals is assessed using economic cost‐benefit analysis. Government mandates are superior to consumption subsidies, especially with suboptimal fuel taxes and the higher costs involved with raising tax revenues. But subsidies with mandates cause adverse interaction effects; oil consumption is subsidized instead. This unique result also applies to renewable electricity that faces similar policy combinations. Ethanol policy can have a significant impact on corn prices; if not, inefficiency costs rise sharply. Ethanol policy can increase the inefficiency of farm subsidies and vice‐versa. Policies that discriminate against trade, such as production subsidies and tariffs, can more than offset any benefits of a mandate. Sustainability standards are ineffective and illegal according to the WTO, and so should be re‐designed.

Biofuels: Potential production capacity, effects on grain and livestock sectors, and implications for food prices and consumers

2009

We examined four evolution paths of the biofuel sector using a partial equilibrium world agricultural sector model in CARD that includes the new RFS in the 2007 EISA, a two-way relationship between fossil energy and biofuel markets, and a new trend toward corn oil extraction in ethanol plants. At one extreme, one scenario eliminates all support to the biofuel sector when the energy price is low, while the other extreme assumes no distribution bottleneck in ethanol demand growth when the energy price is high. The third scenario ...

Food Versus Fuel: How Biofuels Make Food More Costly and Gasoline Cheaper

2008

This paper describes forces behind rising food prices and presents a model to characterize the magnitude of biofuel impacts on food and gasoline prices. The results of this model are compared to other estimates. We argue that a renewed commitment to agricultural productivity growth is needed to overcome current food and fuel challenges.

Meeting the Mandate for Biofuels: Implications for Land Use and Food and Fuel Prices

2010

Biofuels have been promoted to achieve energy security and as a solution to mitigating climate change. This research presents a framework to examine the extent to which biofuel mandates and subsidies reduce gasoline consumption and their implications for the food and fuel prices. A dynamic, multi-market equilibrium model, Biofuel and Environmental Policy Analysis Model (BEPAM), is used to estimate the