Tax Exemption for Biofuels in Germany: Is Bio-Ethanol Really an Option for Climate Policy?
AbstractLast year the German Parliament exempted biofuels from the gasoline tax. The promotion of biofuels is being justified by allegedly positive effects on climate, energy, and agricultural policy goals. The paper takes a closer look at bio-ethanol as a substitute for gasoline. We analyze the basic conditions that provide the setting for the production and promotion of biofuels and show that the production of bio-ethanol in Germany is not competitive. Using energy and greenhouse gas balances we demonstrate that a possible increased use of bioethanol to reduce greenhouse gas emissions is inefficient and that there are preferred alternative strategies. In addition, scenarios on the development of the bio-ethanol market are derived from a model that allows for variations in decisive variables and reflects the production and trade chain of bio-ethanol.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1184.
Length: 36 pages
Date of creation: Sep 2003
Date of revision:
biofuels; ethanol; climate policy; agricultural policy; gasoline tax; energy balances; GHG balances;
Find related papers by JEL classification:
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-06-02 (All new papers)
- NEP-EEC-2004-06-02 (European Economics)
- NEP-PBE-2004-06-02 (Public Economics)
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.:
- Grant Kirkpatrick & Gernot Klepper & Robert W.R. Price, 2001. "Making Growth More Environmentally Sustainable in Germany," OECD Economics Department Working Papers 276, OECD Publishing.
- Ryan, Lisa & Convery, Frank & Ferreira, Susana, 2006. "Stimulating the use of biofuels in the European Union: Implications for climate change policy," Energy Policy, Elsevier, vol. 34(17), pages 3184-3194, November.
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