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Competition for Land in the Global Bioeconomy

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  • Hertel, Thomas W.
  • Steinbuks, Jevgenijs
  • Baldos, Uris Lantz C.

Abstract

The global land use implications of biofuel expansion have received considerable attention in the literature over the past decade. Model-based estimates of the emissions from cropland expansion have been used to assess the environmental impacts of biofuel policies. And integrated assessment models have estimated the potential for biofuels to contribute to greenhouse gas abatement over the coming century. All of these studies feature, explicitly or implicitly, competition between biofuel feed stocks and other land uses. However, the economic mechanisms governing this competition, as well as the contribution of biofuels to global land use change, have not received the close scrutiny that they deserve. The purpose of this paper is to offer a deeper look at these factors. We begin with a comparative static analysis which assesses the impact of exogenously specified forecasts of biofuel expansion over the 2006-2035 period. Global land use change is decomposed according to the three key margins of economic response: extensive supply, intensive supply, and demand. Under the International Energy Agency’s “New Policies” scenario, biofuels account for nearly one-fifth of global land use change over the 2006-2035 period. The paper also offers a comparative dynamic analysis which determines the optimal path for first and second generation biofuels over the course of the entire 21st century. In the absence of GHG regulation, the welfare-maximizing path for global land use allocates 170 Mha to biofuel feed stocks by 2100, with the associated biofuels accounting for about 30% of global liquid fuel consumption. This area expansion is somewhat diminished by expected climate change impacts on agriculture, while it is significantly increased by a moderately aggressive GHG emissions target and by advances in conversion efficiency of second generation biofuels. Keywords: Biofuels, global land use, partial equilibrium analysis, comparative statics, comparative dynamics, climate change impacts, carbon policies.

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Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 129614.

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Date of creation: 2012
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Handle: RePEc:ags:iaae12:129614

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Keywords: Biofuels; global land use; partial equilibrium analysis; comparative statics; comparative dynamics; climate change impacts; carbon policies; Land Economics/Use; Resource /Energy Economics and Policy; Q11; Q15; Q24; Q42; Q54;

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  1. Fabiosa, Jacinto F. & Beghin, John C. & Dong, Fengxia & Elobeid, Amani & Tokgoz, Simla & Yu, Tun-Hsiang, 2009. "Land Allocation Effects of the Global Ethanol Surge: Predictions from the International FAPRI Model," Staff General Research Papers 13054, Iowa State University, Department of Economics.
  2. Rose, Steven K. & Ahammad, Helal & Eickhout, Bas & Fisher, Brian & Kurosawa, Atsushi & Rao, Shilpa & Riahi, Keywan & van Vuuren, Detlef P., 2012. "Land-based mitigation in climate stabilization," Energy Economics, Elsevier, vol. 34(1), pages 365-380.
  3. Dicks, Michael R. & Campiche, Jody L. & Torre Ugarte, Daniel de la & Hellwinckel, Chad M. & Bryant, Henry L. & Richardson, James W., 2009. "Land Use Implications of Expanding Biofuel Demand," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(02), August.
  4. Seale, James L., Jr. & Regmi, Anita & Bernstein, Jason, 2003. "International Evidence On Food Consumption Patterns," Technical Bulletins 33580, United States Department of Agriculture, Economic Research Service.
  5. Simla Tokgoz & Amani Elobeid & Jacinto F. Fabiosa & Dermot J. Hayes & Bruce A. Babcock & Tun-Hsiang (Edward) Yu & Fengxia Dong & Chad E. Hart & John C. Beghin, 2007. "Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets," Food and Agricultural Policy Research Institute (FAPRI) Publications 07-sr101, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  6. Keeney, Roman & Hertel, Thomas, 2008. "The Indirect Land Use Impacts of U.S. Biofuel Policies: The Importance of Acreage, Yield, and Bilateral Trade Responses," GTAP Working Papers 2810, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  7. Banse, Martin & van Meijl, Hans & Tabeau, Andrzej A. & Woltjer, Geert B., 2008. "Impact of EU Biofuel Policies on World Agricultural and Food Markets," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6476, European Association of Agricultural Economists.
  8. Gurgel Angelo & Reilly John M & Paltsev Sergey, 2007. "Potential Land Use Implications of a Global Biofuels Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-36, December.
  9. Nelson B. Villoria & Thomas W. Hertel, 2011. "Geography Matters: International Trade Patterns and the Indirect Land Use Effects of Biofuels," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(4), pages 919-935.
  10. Muhammad, Andrew & Meade, Birgit Gisela Saager, 2011. "International Evidence on Food Consumption Patterns: An Update Using 2005 International Comparison Program Data," Technical Bulletins 120252, United States Department of Agriculture, Economic Research Service.
  11. Thaeripour, Farzad & Hertel, Thomas W. & Tyner, Wallace E. & Beckman, Jayson F. & Birur, Dileep K., 2008. "Biofuels and their By-Products: Global Economic and Environmental Implications," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6452, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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