Bioenergy trade, a theoretical analysis

Though the potential of bioenergy in the mitigation of greenhouse gases (GHG) coming from fossil energies is strongly debated, several developed countries such as the United States, the European Union and Japan have for several years already outlined ambitious objectives of incorporating bioenergy into their energy package in order to reduce their GHG emissions, notably in the field of transportation. Bioenergies are presented as an alternative to fossil fuels that is both renewable and relatively clean. The policies implemented give rise to little in the way of imports and yet, for biofuels to reach a 10% share of fuel consumption in transports, the United States, Canada and the EU would need to use 30%, 36% and 72% of their farm lands respectively (Von Lampe, 2006). A very simplified theoretical model of the world economy shows that opening up Bioenergy to trade would result in an increase in GHG emissions if Southern countries have a comparative advantage in the industrial sector, or conversely, a reduction thanks to bioenergy imports if Northern countries have the best performing industrial sector.