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Market Interactions, Farmer Choices, and the Sustainability of Growing Advanced Biofuels

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  • Jiang, Yong
  • Swinton, Scott M.

Abstract

Advanced biofuels such as cellulosic ethanol are of great interest for their potential to supply a significant portion of U.S. fuel needs plus advantages over corn grain-based ethanol. The sustainability of agriculture-based advanced biofuels depends on how farmers would respond in providing biomass feedstock, yet economic behavior by farmers has been under recognized by the science community. Focusing on markets and policy incentives, this research shows that farmers are unlikely to convert current grain cropland to grow a dedicated cellulosic biomass crop such as switchgrass. However, the financial incentives to harvest cellulosic biomass provided by the 2008 farm bill may stimulate corn production due to demand for corn grain for feed and ethanol and corn residues for advanced biofuels. The prospect of continuous, possibly expanding corn production for advanced biofuels raises the same environmental issues as for corn grain-based ethanol. To assure the environmental sustainability of advanced biofuels production, environmental policies are needed to complement existing bioenergy initiatives.

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Bibliographic Info

Paper provided by Michigan State University, Department of Agricultural, Food, and Resource Economics in its series Staff Papers with number 43634.

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Date of creation: Sep 2008
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Handle: RePEc:ags:midasp:43634

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Web page: http://www.aec.msu.edu/agecon/
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Related research

Keywords: biomass; energy; advanced biofuels; corn; land use; switchgrass; cellulosic ethanol; Environmental Economics and Policy; Production Economics; Resource /Energy Economics and Policy; Q42; Q12;

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  1. Duffy, Michael, 2007. "Estimated Costs for Production, Storage, and Transportation of Switchgrass," Staff General Research Papers 12917, Iowa State University, Department of Economics.
  2. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers 12881, Iowa State University, Department of Economics.
  3. Hallam, Arne & Anderson, I. C. & Buxton, D. R., 2001. "Comparative Economic Analysis of Perennial, Annual and Intercrops for Biomass Production," Staff General Research Papers 5076, Iowa State University, Department of Economics.
  4. Hipple, Pat & Duffy, Michael, 2002. "Farmer's Motivation for Adoption of Switchgrass," Staff General Research Papers 10347, Iowa State University, Department of Economics.
  5. Duffy, Michael & Nanhou, Virginie, 2002. "Costs of Producing Switchgrass for Biomass in Southern Iowa," Staff General Research Papers 10346, Iowa State University, Department of Economics.
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