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Is there a role for biofuels in promoting energy self sufficiency and security? A CGE analysis of biofuel policy in Thailand

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  • Wianwiwat, Suthin
  • Asafu-Adjaye, John

Abstract

Given the rising price of crude oil, some developing countries including Thailand are looking towards developing their domestic renewable energy resources, in particular biofuels. However, there are concerns about the possible adverse effects such a policy strategy would have on key variables such as sectoral output, land allocation and the effects of prices, particularly food prices. This study develops a computable general equilibrium (CGE) model of the Thailand economy that features enhancements of the energy sector and uses it to analyze the government’s recent renewable energy development plan. This plan aims to increase domestic energy use from renewable sources to replace fossil fuel imports. The study simulated specific policies contained in the plan. Among other things, we found that promoting biofuel use causes a rapid increase in the price of biofuel and biofuel feedstock in the short-run, whereas these prices only increase slightly in the long-run due to more elastic supplies. The prices of food and other products marginally increase, implying that food security is not undermined by the policy. On the basis of the findings, the study recommends a review of some of the targets because they were found to be rather high, and a phasing in of others.

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  • Wianwiwat, Suthin & Asafu-Adjaye, John, 2013. "Is there a role for biofuels in promoting energy self sufficiency and security? A CGE analysis of biofuel policy in Thailand," Energy Policy, Elsevier, vol. 55(C), pages 543-555.
    • Handle: RePEc:eee:enepol:v:55:y:2013:i:c:p:543-555
    DOI: 10.1016/j.enpol.2012.12.054
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    5. Chonlakan Benjasak & Keshab Bhattarai, 2019. "General Equilibrium Impacts of VAT and Corporate Income Tax in Thailand," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 25(3), pages 263-276, August.
    6. Djoni Hartono & Ahmad Komarulzaman & Tony Irawan & Anda Nugroho, 2020. "Phasing out Energy Subsidies to Improve Energy Mix: A Dead End," Energies, MDPI, vol. 13(9), pages 1-15, May.
    7. Anan Wattanakuljarus, 2019. "Effects and burdens of a carbon tax scheme in Thailand," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(2), pages 173-219, June.
    8. Bhattarai, Keshab & Benjasak, Chonlakan, 2021. "Growth and redistribution impacts of income taxes in the Thai Economy: A dynamic CGE analysis," The Journal of Economic Asymmetries, Elsevier, vol. 23(C).
    9. Britz, Wolfgang & Li, Jingwen & Shang, Linmei, 2021. "Combining large-scale sensitivity analysis in Computable General Equilibrium models with Machine Learning: An Example Application to policy supporting the bio-economy," Conference papers 333285, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. De Lucia, Caterina & Bartlett, Mark, 2014. "Implementing a biofuel economy in the EU: Lessons from the SUSTOIL project and future perspectives for next generation biofuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 22-30.
    11. Piyanon Haputta & Thongchart Bowonthumrongchai & Nattapong Puttanapong & Shabbir H. Gheewala, 2022. "Effects of Biofuel Crop Expansion on Green Gross Domestic Product," Sustainability, MDPI, vol. 14(6), pages 1-20, March.
    12. Thomas Schinko & Birgit Bednar-Friedl & Barbara Truger & Rafael Bramreiter & Nadejda Komendantova & Michael Hartner, 2020. "Economy-wide benefits and costs of local-level energy transition in Austrian Climate and Energy Model Regions," Graz Economics Papers 2020-05, University of Graz, Department of Economics.
    13. Ahmed, Abubakari & Campion, Benjamin Betey & Gasparatos, Alexandros, 2017. "Biofuel development in Ghana: policies of expansion and drivers of failure in the jatropha sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 133-149.
    14. Héctor Fernando Villatoro Flores & Takaaki Furubayashi & Toshihiko Nakata, 2016. "Analysis of Trade-offs Between First-generation Biofuels and Food Production for Japan Using CGE Modelling," International Journal of Economic Policy Studies, Springer, vol. 11(1), pages 1-24, January.
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    16. Elizondo, Alejandra & Boyd, Roy, 2017. "Economic impact of ethanol promotion in Mexico: A general equilibrium analysis," Energy Policy, Elsevier, vol. 101(C), pages 293-301.

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