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The Economy-Wide Effects in The United States of Replacing Crude Petroleum with Biomass

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  • Dixon, Peter B.
  • Osborne, Stefan
  • Rimmer, Maureen T.

Abstract

Part of President Bush’s energy policy is to encourage research aimed at reducing the cost of biomass-based motor fuels to become competitive with petroleum-based fuels. We use a dynamic, CGE model to investigate the economy-wide implications of successful implementation of this policy. We find in the long-run, 2020, that the U.S. would experience significant benefits arising from: (1) substitution of biomass whose price is likely to fall in the long-run for crude petroleum whose price is likely to rise; (2) reduction in the world price of crude petroleum; (3) an increase in employment; and (4) an increase in export prices.

Suggested Citation

  • Dixon, Peter B. & Osborne, Stefan & Rimmer, Maureen T., 2007. "The Economy-Wide Effects in The United States of Replacing Crude Petroleum with Biomass," Conference papers 331569, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331569
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    References listed on IDEAS

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