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What Is the Social Value of Second Generation Biofuels?

Author

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  • Thomas W. Hertel
  • Jevgenijs Steinbuks
  • Wallace E. Tyner

Abstract

What are second-generation (2G) biofuel technologies worth to global society? A dynamic, economic model is used to assess the impact that introducing 2G biofuels technology has on crops, livestock, biofuels, forestry, and environmental services, as well as greenhouse gas emissions. Under baseline conditions, this amounts to $64 billion and is $84 billion under the optimistic technology case, suggesting that investing in 2G technology could be appropriate. Under greenhouse gas regulation, global valuation more than doubles to $139 and $174 billion, respectively. A flat energy price scenario eliminates the value of 2G technology to society.

Suggested Citation

  • Thomas W. Hertel & Jevgenijs Steinbuks & Wallace E. Tyner, 2016. "What Is the Social Value of Second Generation Biofuels?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(4), pages 599-617.
    • Handle: RePEc:oup:apecpp:v:38:y:2016:i:4:p:599-617.
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    File URL: http://hdl.handle.net/10.1093/aepp/ppv027
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    5. Sergey Paltsev, 2012. "Implications of Alternative Mitigation Policies on World Prices for Fossil Fuels and Agricultural Products," WIDER Working Paper Series wp-2012-065, World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:

    1. Cai,Yongyang & Steinbuks,Jevgenijs & Judd,Kenneth L. & Jaegermeyr,Jonas & Hertel,Thomas W., 2020. "Modeling Uncertainty in Large Natural Resource Allocation Problems," Policy Research Working Paper Series 9159, The World Bank.

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    More about this item

    Keywords

    Global land use; biofuels; climate policy; climate impacts; energy prices;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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