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Impact of Switching Production to Bioenergy Crops: The Switchgrass Example

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  • McDonald, Scott
  • Robinson, Sherman
  • Thierfelder, Karen

Abstract

This paper reports the results from simulations that evaluate the general equilibrium effects of substituting switchgrass, a biomass, for crude oil in USA petroleum production. The new production process is less efficient and USA GDP declines slightly. As switchgrass production expands, USA agriculture contracts and the world price of cereals increases. The world price of crude oil falls as USA import demand declines. The net effect of the price and income changes is a general decline in economic welfare. Moreover, the declines in welfare are proportionately greater for developing countries who produce small quantities of agricultural commodities whose prices increase.

Suggested Citation

  • McDonald, Scott & Robinson, Sherman & Thierfelder, Karen, 2005. "Impact of Switching Production to Bioenergy Crops: The Switchgrass Example," Conference papers 331350, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331350
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    References listed on IDEAS

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    1. Robinson, Sherman & Kilkenny, Maureen & Hanson, Kenneth, 1990. "The USDA/ERS Computable General Equilibrium (CGE) Model of the United States," Staff Reports 278341, United States Department of Agriculture, Economic Research Service.
    2. Lewis, Jeffrey D. & Robinson, Sherman & Wang, Zhi, 1995. "Beyond the Uruguay Round: The implications of an Asian free trade area," China Economic Review, Elsevier, vol. 6(1), pages 35-90.
    3. Jaime de MELO & Sherman ROBINSON, 2015. "Product Differentiation And The Treatment Of Foreign Trade In Computable General Equilibrium Models Of Small Economies," World Scientific Book Chapters, in: Modeling Developing Countries' Policies in General Equilibrium, chapter 2, pages 21-41, World Scientific Publishing Co. Pte. Ltd..
    4. McDonald, Scott & Thierfelder, Karen, 2004. "Deriving A Global Social Accounting Matrix From Gtap Versions 5 And 6 Data," Technical Papers 28716, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Cerra, Valerie & Saxena, Sweta Chaman, 2003. "How responsive is Chinese export supply to market signals?," China Economic Review, Elsevier, vol. 14(3), pages 350-370.
    6. Huang, Jikun & Rozelle, Scott & Zhang, Linxiu, 2001. "WTO and agriculture: radical reforms or the continuation of gradual transition," China Economic Review, Elsevier, vol. 11(4), pages 397-401.
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    10. Aziz Elbehri & Thomas Hertel & Will Martin, 2003. "Estimating the Impact of WTO and Domestic Reforms on the Indian Cotton and Textile Sectors: a General‐Equilibrium Approach," Review of Development Economics, Wiley Blackwell, vol. 7(3), pages 343-359, August.
    11. Devaragan, Shantayanan & Lewis, Jeffrey D. & Robinson, Sherman, 1990. "Policy lessons from trade-focused, two-sector models," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 625-657.
    12. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    13. Kilkenny, Maureen, 1991. "Computable General Equilibrium Modeling of Agricultural Policies: Documentation of the 30-Sector FPGE GAMS Model of the United States," Staff Reports 278539, United States Department of Agriculture, Economic Research Service.
    14. Devarajan, Shantayanan & Lewis, Jeffrey & Robinson, Sherman, 1990. "Policy Lessons from Two-Sector Models," CUDARE Working Papers 198566, University of California, Berkeley, Department of Agricultural and Resource Economics.
    15. Scott McDonald & Sherman Robinson & Karen Thierfelder, 2005. "A SAM Based Global CGE Model using GTAP Data January 2005," Working Papers 2005001, The University of Sheffield, Department of Economics, revised Jan 2005.
    16. McDonald, Scott & Karen Thierfelder, 2004. "Deriving a Global Social Accounting Matrix from GTAP Versions 5 and 6 Data," GTAP Technical Papers 1645, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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    Citations

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    Cited by:

    1. Peters, Jörg & Thielmann, Sascha, 2008. "Promoting biofuels: Implications for developing countries," Energy Policy, Elsevier, vol. 36(4), pages 1538-1544, April.
    2. Sukati, Mphumuzi, 2014. "The South African Bio ethanol blend mandate and its implications on regional agricultural markets and welfare," MPRA Paper 57702, University Library of Munich, Germany.
    3. Banse, M. & Sorda, G., 2010. "Impact of Different Biofuel Policy Options on Agricultural Production and Land Use in Germany," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 45, March.
    4. Golan, Jennifer & Lay, Jann, 2008. "More Coffee, More Cigarettes? Coffee Market Liberalisation, Gender, and Bargaining in Uganda," Conference papers 331806, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Adkins, Liwayway G. & Garbaccio, Richard F., 2007. "Coordinating Global Trade and Environmental Policy: The Role of Pre-Existing Distortions," Conference papers 331592, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Neuwahl, Frederik & Löschel, Andreas & Mongelli, Ignazio & Delgado, Luis, 2008. "Employment impacts of EU biofuels policy: Combining bottom-up technology information and sectoral market simulations in an input-output framework," Ecological Economics, Elsevier, vol. 68(1-2), pages 447-460, December.
    7. Ignaciuk, Adriana M. & Dellink, Rob B., 2006. "Biomass and multi-product crops for agricultural and energy production--an AGE analysis," Energy Economics, Elsevier, vol. 28(3), pages 308-325, May.
    8. Kung, Chih-Chun & Cao, Xiaoyong & Choi, Yongrok & Kung, Shan-Shan, 2019. "A stochastic analysis of cropland utilization and resource allocation under climate change," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    9. Kung, Chih-Chun, 2019. "A stochastic evaluation of economic and environmental effects of Taiwan's biofuel development under climate change," Energy, Elsevier, vol. 167(C), pages 1051-1064.
    10. De Lucia, Caterina & Bartlett, Mark, 2014. "Implementing a biofuel economy in the EU: Lessons from the SUSTOIL project and future perspectives for next generation biofuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 22-30.
    11. Lyrio de Oliveira, Lucas & García Kerdan, Iván & de Oliveira Ribeiro, Celma & Oller do Nascimento, Claudio Augusto & Rego, Erik Eduardo & Giarola, Sara & Hawkes, Adam, 2020. "Modelling the technical potential of bioelectricity production under land use constraints: A multi-region Brazil case study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    12. Makena COFFMAN, 2009. "An Assessment of Bioenergy in an Island Economy," EcoMod2009 21500023, EcoMod.

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