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Meeting Biofuels Targets: Implications for Land Use, Greenhouse Gas Emissions, and Nitrogen Use in Illinois

In: Handbook of Bioenergy Economics and Policy

Author

Listed:
  • Madhu Khanna

    (University of Illinois)

  • Hayri Önal

    (University of Illinois)

  • Xiaoguang Chen

    (University of Illinois)

  • Haixiao Huang

    (University of Illinois)

Abstract

This article develops a dynamic micro-economic land use model to identify the cost-effective allocation of cropland for traditional row crops and perennial grasses and the mix of cellulosic feedstocks needed to meet predetermined biofuel targets over the 2007–2022 period. Yields of perennial grasses obtained from a biophysical model and together with county level data on costs of production for Illinois are used to examine the implications of these targets for crop and biofuel costs, greenhouse gas emissions, and nitrogen use. The economic viability of cellulosic feedstocks is found to depend on their yields per acre and the opportunity cost of land. The mix of viable cellulosic feedstocks varies spatially and temporally with corn stover and miscanthus coexisting in the state; corn stover is viable mainly in central and northern Illinois while miscanthus acres are primarily located in southern Illinois. Biofuel targets lead to a significant shift in acreage from soybeans and pasture to corn and a change in crop rotation and tillage practices. The biofuel targets assumed here lead to a reduction in greenhouse gas emissions, but an increase in nitrogen use.

Suggested Citation

  • Madhu Khanna & Hayri Önal & Xiaoguang Chen & Haixiao Huang, 2010. "Meeting Biofuels Targets: Implications for Land Use, Greenhouse Gas Emissions, and Nitrogen Use in Illinois," Natural Resource Management and Policy, in: Madhu Khanna & Jürgen Scheffran & David Zilberman (ed.), Handbook of Bioenergy Economics and Policy, chapter 0, pages 287-305, Springer.
    • Handle: RePEc:spr:nrmchp:978-1-4419-0369-3_17
    DOI: 10.1007/978-1-4419-0369-3_17
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    Cited by:

    1. Chen, Xiaoguang & Khanna, Madhu & Onal, Hayri, 2009. "The Economic Potential of Second-Generation Biofuels: Implications for Social Welfare, Land Use and Greenhouse Gas Emissions in Illinois," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49484, Agricultural and Applied Economics Association.
    2. Hu, Kejia & Chen, Yuche, 2019. "Equilibrium fuel supply and carbon credit pricing under market competition and environmental regulations: A California case study," Applied Energy, Elsevier, vol. 236(C), pages 815-824.
    3. Gomes, Gabriel & Hache, Emmanuel & Mignon, Valérie & Paris, Anthony, 2018. "On the current account - biofuels link in emerging and developing countries: do oil price fluctuations matter?," Energy Policy, Elsevier, vol. 116(C), pages 60-67.
    4. Carmen Aina & Lorenzo Cappellari & Marco Francesconi, 2010. "Student Performance may not Improve when Universities are Choosier," CESifo Working Paper Series 3264, CESifo.
    5. Ren, Xiaolin & Fullerton, Don & Braden, John B., 2011. "Optimal taxation of externalities interacting through markets: A theoretical general equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 33(3), pages 496-514, September.
    6. Bai, Yun & Ouyang, Yanfeng & Pang, Jong-Shi, 2012. "Biofuel supply chain design under competitive agricultural land use and feedstock market equilibrium," Energy Economics, Elsevier, vol. 34(5), pages 1623-1633.

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