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US biofuels subsidies and CO2 emissions: An empirical test for a weak and a strong green paradox

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  • Grafton, R. Quentin
  • Kompas, Tom
  • Long, Ngo Van
  • To, Hang

Abstract

Using energy data over the period 1981–2011 we find that US biofuels subsidies and production have provided a perverse incentive for US fossil fuel producers to increase their rate of extraction that has generated a weak green paradox. Further, in the short-run if the reduction in the CO2 emissions from a one-to-one substitution between biofuels and fossil fuels is less than 26 percent, or less than 57 percent if long run effect is taken into account, then US biofuels production is likely to have resulted in a strong green paradox. These results indicate that subsidies for first generation biofuels, which yield a low level of per unit CO2 emission reduction compared to fossil fuels, might have contributed to additional net CO2 emissions over the study period.

Suggested Citation

  • Grafton, R. Quentin & Kompas, Tom & Long, Ngo Van & To, Hang, 2014. "US biofuels subsidies and CO2 emissions: An empirical test for a weak and a strong green paradox," Energy Policy, Elsevier, vol. 68(C), pages 550-555.
  • Handle: RePEc:eee:enepol:v:68:y:2014:i:c:p:550-555
    DOI: 10.1016/j.enpol.2013.11.006
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    References listed on IDEAS

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    Cited by:

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    9. Moiseyev, Alexander & Solberg, Birger & Kallio, A. Maarit I., 2014. "The impact of subsidies and carbon pricing on the wood biomass use for energy in the EU," Energy, Elsevier, vol. 76(C), pages 161-167.
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    13. Hill, Jason & Tajibaeva, Liaila & Polasky, Stephen, 2016. "Climate consequences of low-carbon fuels: The United States Renewable Fuel Standard," Energy Policy, Elsevier, vol. 97(C), pages 351-353.
    14. Shao, Shuai & Yang, Lili & Gan, Chunhui & Cao, Jianhua & Geng, Yong & Guan, Dabo, 2016. "Using an extended LMDI model to explore techno-economic drivers of energy-related industrial CO2 emission changes: A case study for Shanghai (China)," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 516-536.

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    Keywords

    Biofuels; Fossil fuels; CO2 emissions;

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