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Land use change impacts of biofuels: Near-VAR evidence from the US

  • Piroli, Giuseppe
  • Ciaian, Pavel
  • Kancs, d'Artis

The present paper studies the land use change impacts of fuels and biofuels. We test the theoretical hypothesis, which says that changes in fuel prices cause changes in land use both directly and indirectly and that, because of price inter-dependencies, biofuels reinforce the land use change impacts. We apply time-series analytical mechanisms to five major traded agricultural commodities, the cultivated area of agricultural land and crude oil price. Our data consists of yearly observations extending from 1950 to 2007 for the US. The empirical findings confirm that markets for crude oil and cultivated agricultural land are interdependent: an increase in oil price by 1dollar/barrel increases land use between 54,000 and 68,000ha. We also find that the increase of bioenergy sector accelerates land use change in the US, i.e. food commodities are being substituted for bioenergy crops.

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Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 84 (2012)
Issue (Month): C ()
Pages: 98-109

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Handle: RePEc:eee:ecolec:v:84:y:2012:i:c:p:98-109
DOI: 10.1016/j.ecolecon.2012.09.007
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  1. repec:ner:leuven:urn:hdl:123456789/413548 is not listed on IDEAS
  2. Pavel Ciaian & d'Artis Kancs, 2009. "Interdependencies in the Energy-Bioenergy-Food Price Systems: A Cointegration Analysis," EERI Research Paper Series EERI_RP_2009_06, Economics and Econometrics Research Institute (EERI), Brussels.
  3. Kancs, d'Artis & Wohlgemuth, Norbert, 2008. "Evaluation of renewable energy policies in an integrated economic-energy-environment model," Forest Policy and Economics, Elsevier, vol. 10(3), pages 128-139, January.
  4. Pavel Ciaian & d'Artis Kancs & Miroslava Rajcaniova, 2013. "Bioenergy and Global Land Use Change," LICOS Discussion Papers 33613, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  5. Thomas W. Hertel & Wallace E. Tyner & Dileep K. Birur, 2010. "The Global Impacts of Biofuel Mandates," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 75-100.
  6. Julda Kielyte, 2008. "Estimating Panel Data Models in the Presence of Endogeneity and Selection," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 51(2), pages 1-19.
  7. Swinton, Scott M. & Babcock, Bruce A. & James, Laura K. & Bandaru, Varaprasad, 2011. "Higher US crop prices trigger little area expansion so marginal land for biofuel crops is limited," Energy Policy, Elsevier, vol. 39(9), pages 5254-5258, September.
  8. Gardner Bruce, 2007. "Fuel Ethanol Subsidies and Farm Price Support," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-22, December.
  9. Swinton, Scott & Babcock, Bruce A. & James, Laura K. & Bandaru, Varaprasad, 2011. "Higher U.S. Crop Prices Trigger Little Area Expansion So Marginal Land for Biofuels is Limited," Staff General Research Papers Archive 34897, Iowa State University, Department of Economics.
  10. 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 Archive 12881, Iowa State University, Department of Economics.
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