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Food Production Vs. Biomass Export Vs. Land-Use Change: A Cge Analysis For Argentina

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  • Perry, Miles
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    Abstract

    World trade in biomass is likely to increase in the years up to 2020 as imports are required to meet the demand created (directly or indirectly) by policy measures such as the EU Biofuels Directive. This paper assesses the macroeconomic consequences such large-scale trade for the exporting country, using a computable general equilibrium (CGE) model of Argentina. Given an exogenous increase in world prices for biomass, the model finds that production shifts towards biomass and away from other sectors. Implications of this include changes in the relative prices of goods and the purchasing power of labour. Price rises are largest in land-intensive sectors of the economy and the overall purchasing power of labour is adversely affected since biomass sectors are among the least labour intensive. When expansion of the agricultural area is permitted, relative price changes become less pronounced. However, expansion of the agricultural frontier may have adverse environmental impacts, including lowering the net GHG savings attributable to the biomass produced.

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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13442.

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    Date of creation: 05 Jun 2008
    Date of revision: 16 Feb 2009
    Handle: RePEc:pra:mprapa:13442

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    Keywords: CGE; Biofuels; Argentina;

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    1. von Braun, Joachim, 2007. "The world food situation: New driving forces and required actions," Food policy reports, International Food Policy Research Institute (IFPRI) 18, International Food Policy Research Institute (IFPRI).
    2. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers, Iowa State University, Department of Economics 12881, Iowa State University, Department of Economics.
    3. Ignaciuk, Adriana M. & Dellink, Rob B., 2006. "Biomass and multi-product crops for agricultural and energy production--an AGE analysis," Energy Economics, Elsevier, Elsevier, vol. 28(3), pages 308-325, May.
    4. Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Society for Computational Economics, Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
    5. Thomas F. Rutherford & David G. Tarr, 2003. "Regional Trading Arrangements for Chile: do the Results Differ with a Dynamic Model?," Economie Internationale, CEPII research center, CEPII research center, issue 94-95, pages 261-281.
    6. Bohringer, Christoph & Rutherford, Thomas F., 2008. "Combining bottom-up and top-down," Energy Economics, Elsevier, Elsevier, vol. 30(2), pages 574-596, March.
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