Efficiency of a Biofuel Subsidy Policy in the Presence of Environmental Externalities
AbstractThe object of this paper is to analyze, in a general equilibrium setting with four markets, the efficiency of a biofuel subsidy policy. The analysis takes into account environmental externalities associated both with the production and the consumption of biofuels, as well as associated with the production of agricultural raw material. Our preliminary numerical results, applied to the biodiesel subsidy policy in France, first show that this policy increases the utility of the representative consumer compared to the laissez-faire solution. The same policy action leads, however, to an increased level of agricultural and GHG emissions, in comparison with the laissez-faire solution.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 44399.
Date of creation: 2008
Date of revision:
biofuels; subsidy; environment; Environmental Economics and Policy;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-25 (All new papers)
- NEP-ENE-2008-11-25 (Energy Economics)
- NEP-ENV-2008-11-25 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Lundgren, Tommy & Marklund, Per-Olov & Brannlund, Runar & Kristrom, Bengt, 2008. "The Economics of Biofuels," International Review of Environmental and Resource Economics, now publishers, vol. 2(3), pages 237-280, November.
- Gardner Bruce, 2007. "Fuel Ethanol Subsidies and Farm Price Support," Journal of Agricultural & Food Industrial Organization, De Gruyter, De Gruyter, vol. 5(2), pages 1-22, December.
- Ofir D. Rubin & Miguel Carriquiry & Dermot J. Hayes, 2008. "Implied Objectives of U.S. Biofuel Subsidies," Center for Agricultural and Rural Development (CARD) Publications 08-wp459, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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