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Biofuels, Policy Options, and Their Implications: Analyses Using Partial and General Equilibrium Approaches


  • Tyner Wallace

    (Purdue University)

  • Taheripour Farzad

    (Purdue University)


The biofuel industry has been experiencing a period of extraordinary growth, fueled by a combination of high oil prices, ambitious renewable fuel standards, subsidies, and import protection. This rapid growth has important consequences for the US and global economies. In this paper, we examine these consequences from partial and general equilibrium perspectives. We first examine US biofuel policy backgrounds to determine factors which caused the boom in the ethanol industry in recent years. Then we use a partial equilibrium model to investigate the economic consequences of further expansion in the ethanol industry for the key economic variables of the US agricultural and energy markets under alternative policy options which might be used to promote ethanol production in the future. Finally, we extend our analyses to examine consequences of further biofuel production at a global scale. One of the important conclusions of the research regards the importance of the link between energy and agricultural markets that has now come into being. That linkage has profound implications for the agricultural sector globally.

Suggested Citation

  • Tyner Wallace & Taheripour Farzad, 2008. "Biofuels, Policy Options, and Their Implications: Analyses Using Partial and General Equilibrium Approaches," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(2), pages 1-19, December.
  • Handle: RePEc:bpj:bjafio:v:6:y:2008:i:2:n:9

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    References listed on IDEAS

    1. Hertel, Thomas W. & Tyner, Wallace E. & Birur, Dileep K., 2008. "Biofuels for all? Understanding the Global Impacts of Multinational Mandates," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6526, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    3. Tiffany, Douglas G. & Eidman, Vernon R., 2003. "Factors Associated With Success Of Fuel Ethanol Producers," Staff Papers 14155, University of Minnesota, Department of Applied Economics.
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    Cited by:

    1. Tyner, Wallace E. & Taheripour, Farzad & Perkis, David, 2010. "Comparison of fixed versus variable biofuels incentives," Energy Policy, Elsevier, vol. 38(10), pages 5530-5540, October.
    2. Wallace E. Tyner, 2010. "The integration of energy and agricultural markets," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 193-201, November.
    3. Bai, Yun & Ouyang, Yanfeng & Pang, Jong-Shi, 2016. "Enhanced models and improved solution for competitive biofuel supply chain design under land use constraints," European Journal of Operational Research, Elsevier, vol. 249(1), pages 281-297.
    4. María Blanco & Marcel Adenäuer & Shailesh Shrestha & Arno Becker, 2012. "Methodology to assess EU Biofuel Policies: The CAPRI Approach," JRC Working Papers JRC80037, Joint Research Centre (Seville site).
    5. Finco, Adele & Padella, Monica & Spinozzi, Romina & Benedetti, Andrea, 2010. "Biofuel And Policy Alternatives: A Farm Level Analysis," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 188088, International Consortium on Applied Bioeconomy Research (ICABR).
    6. Abbott, Philip C. & Hurt, Christopher & Tyner, Wallace E., 2009. "What's Driving Food Prices? March 2009 Update," Issue Reports 48495, Farm Foundation.
    7. Zheng, Qiujie & Shumway, C. Richard, 2012. "Washington biofuel feedstock crop supply under output price and quantity uncertainty," Energy Policy, Elsevier, vol. 48(C), pages 515-525.
    8. Bai, Yun & Ouyang, Yanfeng & Pang, Jong-Shi, 2012. "Biofuel supply chain design under competitive agricultural land use and feedstock market equilibrium," Energy Economics, Elsevier, vol. 34(5), pages 1623-1633.
    9. Delshad, Ashlie B. & Raymond, Leigh & Sawicki, Vanessa & Wegener, Duane T., 2010. "Public attitudes toward political and technological options for biofuels," Energy Policy, Elsevier, vol. 38(7), pages 3414-3425, July.

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