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A spatial equilibrium analysis of using agricultural resources to produce biofuel

Author

Listed:
  • Chih-Chun Kung

    (School of Economics, Jiangxi University of Finance and Economics, Nanchang, China)

  • Tao Wu

Abstract

In order to alleviate the potential damage from climate change and fulfil the requirements contracted in the Paris Agreement (COP 24), China has promulgated the mandatory regulation on ethanol-blend gasoline to reduce current levels of CO2 emissions. Since large-scale bioenergy development involves various aspects such as feedstock selection (energy crops, crop wastes), technology alternatives (conventional and cellulosic ethanol, pyrolysis), government subsidy (land use, energy crop subsidy) and carbon trade mechanism, an analysis that integrates economic, environmental, and social effects is necessary to explore the optimal biofuel strategy and social effects. This study proposes a price endogenous, partial equilibrium mathematical programming model to investigate how the selection of bioenergy crops and bioenergy technologies influences the amount of net bioenergy production, carbon sequestration, government subsidies, and cultivation patterns. We show that the conjunctive use of agricultural wastes can be an effective addition to current biofuel production. The results also indicate that at high gasoline and emissions prices, more land used for the energy crop program results in a significant change in government expenditure. In addition, net emissions reduction and emissions offset efficiency can vary substantially when different bioenergy techniques are adopted.

Suggested Citation

  • Chih-Chun Kung & Tao Wu, 2020. "A spatial equilibrium analysis of using agricultural resources to produce biofuel," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(2), pages 74-83.
    • Handle: RePEc:caa:jnlage:v:66:y:2020:i:2:id:201-2019-agricecon
    DOI: 10.17221/201/2019-AGRICECON
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    References listed on IDEAS

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