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The Policy Objectives of a Biofuel Industry in Canada: An Assessment

  • Danny G. Le Roy

    ()

    (Department of Economics, The University of Lethbridge, Lethbridge, AB, T1K 3M4, Canada)

  • Kurt K. Klein

    ()

    (Department of Economics, The University of Lethbridge, Lethbridge, AB, T1K 3M4, Canada)

Registered author(s):

    Canada has a huge stock of biomass resources, which provides a basis (and a temptation) for development of a major bio-fuels industry. Both federal and provincial governments have engaged in a wide array of subsidies, mandates, and other measures to stimulate production and consumption of biofuels. As a result, biofuels has become a growth industry in Canada with production of ethanol almost 10 times higher than it was ten years earlier. However, this has come at considerable cost to taxpayers. Increased biofuel production has resulted in minimal reduction in greenhouse gases, short run (but not long run) increases in net farm income (that benefited grain and oilseed producers but hurt livestock producers), large increases in the prices of farm land due to the higher grain and oilseed prices, and minimal impacts on rural economic diversification.

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    Article provided by MDPI, Open Access Journal in its journal Agriculture.

    Volume (Year): 2 (2012)
    Issue (Month): 4 (December)
    Pages: 436-451

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    Handle: RePEc:gam:jagris:v:2:y:2012:i:4:p:436-451:d:22242
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    1. Swenson, David A., 2006. "Input-Outrageous: The Economic Impacts of Modern Biofuels Production," Staff General Research Papers 12644, Iowa State University, Department of Economics.
    2. Henke, J.M. & Klepper, G. & Schmitz, N., 2005. "Tax exemption for biofuels in Germany: Is bio-ethanol really an option for climate policy?," Energy, Elsevier, vol. 30(14), pages 2617-2635.
    3. Mitchell, Catherine & Connor, Peter, 2004. "Renewable energy policy in the UK 1990-2003," Energy Policy, Elsevier, vol. 32(17), pages 1935-1947, November.
    4. Ryan, Lisa & Convery, Frank & Ferreira, Susana, 2006. "Stimulating the use of biofuels in the European Union: Implications for climate change policy," Energy Policy, Elsevier, vol. 34(17), pages 3184-3194, November.
    5. Brian S. Freeze & T. Peters, 1999. "A Note on the Profitability of Wheat-ethanol-feedlot Production in Alberta," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(1), pages 67-78, 03.
    6. 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.
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