Do Biofuel Mandates Raise Food Prices?
AbstractBiofuels have received a lot of attention as a substitute for gasoline in transportation. They have been blamed universally for recent increases in world food prices. Both the United States and the European Union have adopted mandatory blending policies that require a sharp increase in their use. Many studies have shown that these energy mandates may have a large (30-60%) impact on food prices. We develop a model that takes into account dietary preferences - the fact that with rising incomes, people in the developing world will consume more meat and dairy products, which are land-intensive relative to cereals. On the supply side, we allow for conversion of new lands to farming. We show that about half the increase in food prices can be attributed to population growth and dietary changes, and only the remaining come from biofuel policy. Moreover, with endogenous land supply, food price increases are likely to be much smaller than predicted by other studies. Finally, these biofuel policies do not lead to any reduction in carbon emissions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS in its series Economics Working Paper Archive (University of Rennes 1 & University of Caen) with number 201214.
Date of creation: Mar 2012
Date of revision:
Contact details of provider:
Postal: CREM (UMR CNRS 6211) – Faculty of Economics, 7 place Hoche, 35065 RENNES Cedex
Phone: 02 23 23 35 47
Fax: (33) 2 23 23 35 99
Web page: http://crem.univ-rennes1.fr/
More information through EDIRC
Postal: CREM (UMR CNRS 6211) - Faculty of Economics, 7 place Hoche, 35065 Rennes Cedex - France
Find related papers by JEL classification:
- Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
- Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
- 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-AGR-2012-03-21 (Agricultural Economics)
- NEP-ALL-2012-03-21 (All new papers)
- NEP-ENE-2012-03-21 (Energy Economics)
- NEP-ENV-2012-03-21 (Environmental Economics)
- NEP-TRE-2012-03-21 (Transport 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.:
- Hamelinck, Carlo N & Faaij, Andre P.C., 2006. "Outlook for advanced biofuels," Energy Policy, Elsevier, vol. 34(17), pages 3268-3283, November.
- Rajagopal, Deepak & Zilberman, David, 2007. "Review of environmental, economic and policy aspects of biofuels," Policy Research Working Paper Series 4341, The World Bank.
- Xiaoguang Chen & Haixiao Huang & Madhu Khanna, 2012.
"Land-Use And Greenhouse Gas Implications Of Biofuels: Role Of Technology And Policy,"
Climate Change Economics (CCE),
World Scientific Publishing Co. Pte. Ltd., vol. 3(03), pages 1250013-1-1.
- Chen, Xiaoguang & Huang, Haixiao & Khanna, Madhu, 2011. "Land Use and Greenhouse Gas Implications of Biofuels: Role of Technology and Policy," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103216, Agricultural and Applied Economics Association.
- Martin Banse & Hans van Meijl & Andrzej Tabeau & Geert Woltjer, 2008. "Will EU biofuel policies affect global agricultural markets?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 35(2), pages 117-141, June.
- Wiebe, Keith D., 2003. "Linking Land Quality, Agricultural Productivity, And Food Security," Agricultural Economics Reports 34073, United States Department of Agriculture, Economic Research Service.
- Cranfield, J. A. L. & Preckel, Paul V. & Eales, James S. & Hertel, Thomas W., 2002. "Estimating consumer demands across the development spectrum: maximum likelihood estimates of an implicit direct additivity model," Journal of Development Economics, Elsevier, vol. 68(2), pages 289-307, August.
- Uwe Schneider & Bruce McCarl, 2003.
"Economic Potential of Biomass Based Fuels for Greenhouse Gas Emission Mitigation,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 24(4), pages 291-312, April.
- Uwe A. Schneider & Bruce A. McCarl, 2001. "Economic Potential of Biomass-Based Fuels for Greenhouse Gas Emission Mitigation," Center for Agricultural and Rural Development (CARD) Publications 01-wp280, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Don Fullerton & Garth Heutel, 2005.
"The General Equilibrium Incidence of Environmental Taxes,"
NBER Working Papers
11311, National Bureau of Economic Research, Inc.
- Fullerton, Don & Heutel, Garth, 2007. "The general equilibrium incidence of environmental taxes," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 571-591, April.
- Gouel, Christophe & Hertel, Thomas, 2006. "Introducing Forest Access Cost Functions into a General Equilibrium Model," GTAP Research Memoranda 2215, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Golub, Alla & Hertel, Thomas & Sohngen, Brent, 2008. "Land Use Modeling in Recursively-Dynamic GTAP Framework," GTAP Working Papers 2609, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Chakravorty, Ujjayant & Magne, Bertrand & Moreaux, Michel, 2009. "Endogenous Resource Substitution under a Climate Stabilization Policy: Can Nuclear Power Provide Clean Energy?," Working Papers 2009-19, University of Alberta, Department of Economics, revised 01 Sep 2010.
- Bento, Antonio M. & Goulder, Lawrence H. & Jacobsen, Mark R. & von Haefen, Roger H., 2007.
"Distributional and Efficiency Impacts of Increased U.S. Gasoline Taxes,"
127021, Cornell University, Department of Applied Economics and Management.
- Antonio M. Bento & Lawrence H. Goulder & Mark R. Jacobsen & Roger H. von Haefen, 2009. "Distributional and Efficiency Impacts of Increased US Gasoline Taxes," American Economic Review, American Economic Association, vol. 99(3), pages 667-99, June.
- Keyzer, M.A. & Merbis, M.D. & Pavel, I.F.P.W. & van Wesenbeeck, C.F.A., 2005. "Diet shifts towards meat and the effects on cereal use: can we feed the animals in 2030?," Ecological Economics, Elsevier, vol. 55(2), pages 187-202, November.
- Gal Hochman & Scott Kaplan & Deepak Rajagopal & David Zilberman, 2012. "Biofuel and Food-Commodity Prices," Agriculture, MDPI, Open Access Journal, vol. 2(3), pages 272-281, September.
- Koliai, Lyes & Avouyi-Dovi, Sanvi & Ano Sujithan, Kuhanathan, 2014. "On the determinants of food price volatility," Economics Papers from University Paris Dauphine 123456789/12798, Paris Dauphine University.
- Gbadebo Oladosu & Siwa Msangi, 2013. "Biofuel-Food Market Interactions: A Review of Modeling Approaches and Findings," Agriculture, MDPI, Open Access Journal, vol. 3(1), pages 53-71, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CODA-POIREY Hélène).
If references are entirely missing, you can add them using this form.