Use of biofuels diminishes fossil fuel combustion, thereby also reducing net greenhouse gas emissions. However, subsidies are needed to make agricultural biofuel production economically feasible. To explore the economic potential of biofuels in a greenhouse gas mitigation market, the authors incorporate data on production and biofuel processing for the designated energy crops--switchgrass, hybrid poplar, and willow—in a U.S. Agricultural Sector Model, along with data on traditional crop-livestock production and processing, and afforestation of cropland. Net emission coefficients on all included agricultural practices are estimated through crop growth simulation models or are taken from the literature. The authors simulate potential emission mitigation policies or markets using hypothetical carbon prices ranging between $0 and $500 per ton of carbon equivalent. At each carbon price level, the Agricultural Sector Model computes the new market equilibrium, revealing agricultural commodity prices, regionally specific production, input use, welfare levels, environmental impacts, and adoption of alternative management practices such as biofuel production. Results indicate there is no role for biofuels below carbon prices of $50 per ton of carbon equivalent. At these incentive levels, emission reductions through reduced soil tillage and afforestation are more cost efficient. At carbon prices above $50, however, biofuels become increasingly important, and at prices above $180 they dominate all other agricultural strategies.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number
2011.
Length: Date of creation: 18 Oct 2001 Date of revision: Handle: RePEc:isu:genres:2011
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070 Phone: +1 515.294.6741 Fax: +1 515.294.0221 Email: Web page: http://www.econ.iastate.edu More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Stephanie Bridges).
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)