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Evaluating the Consequences of Second Generation Bioenergy Crops on a Grain/Livestock Economy: An Example of the Canadian Prairies

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  • Anderson, Leigh
  • Schoney, Richard
  • Nolan, James

Abstract

Biofuels are used as renewable alternatives to traditional fossil fuels. Government agricultural policies are currently focused on the production and use of so-called first-generation biofuels (FGB). Partly because of the success of many FGB programs, concerns about food and water security have become important considerations in the policy arena. These considerations have led to the development of so-called second-generation biofuel (SGB) technologies, based on relatively low value feedstocks that thrive on marginal land. This changes the competitive environment for biofuels, as SGB’s do not need to compete directly with relatively high-value annual crops. To examine consequences of this situation on the future of mixed farming, we develop an agent based simulation model (ABSM) for the analysis of economic situations characterized by large numbers of dynamically interacting individuals located on a heterogeneous landscape. Like most policies designed with good societal intentions, we find that SGB crops may lead to significant and possibly unwanted trade-offs in agricultural economies. If energy prices become high enough, the model indicates that structural changes in the farming sector will be significant, resulting in a very different agricultural landscape than we see today.

Suggested Citation

  • Anderson, Leigh & Schoney, Richard & Nolan, James, 2014. "Evaluating the Consequences of Second Generation Bioenergy Crops on a Grain/Livestock Economy: An Example of the Canadian Prairies," Miscellaneous Publications 206440, University of Saskatchewan, Department of Bioresource Policy Business and Economics.
    • Handle: RePEc:ags:uskbpm:206440
    DOI: 10.22004/ag.econ.206440
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    References listed on IDEAS

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    2. Torre Ugarte, Daniel de la & Walsh, Marie E. & Shapouri, Hosein & Slinsky, Stephen P., 2003. "The Economic Impacts of Bioenergy Crop Production on U.S. Crop Production," Agricultural Economic Reports 33997, United States Department of Agriculture, Economic Research Service.
    3. Marie Walsh & Daniel de la Torre Ugarte & Hosein Shapouri & Stephen Slinsky, 2003. "Bioenergy Crop Production in the United States: Potential Quantities, Land Use Changes, and Economic Impacts on the Agricultural Sector," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(4), pages 313-333, April.
    4. Chen, Xiaoguang & Khanna, Madhu & Onal, Hayri, 2009. "The Economic Potential of Second-Generation Biofuels: Implications for Social Welfare, Land Use and Greenhouse Gas Emissions in Illinois," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49484, Agricultural and Applied Economics Association.
    5. Becker, Arno, 2008. "Biomass for energy production in the context of selected European and international policy objectives," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43974, European Association of Agricultural Economists.
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