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The Economy-wide Greenhouse Gas Impacts of the Biofuels Boom (or Bust)

Author

Listed:
  • Birur, Dileep K.
  • Golub, Alla A.
  • Hertel, Thomas W.
  • Rose, Steven K.

Abstract

Several studies in the recent past have offered a contrasting and wide range of perspectives on economic and environmental implications of biofuels. In this study we develop a comprehensive and consistent framework for analyzing the global economic interactions and the direct and indirect impacts of biofuels production on greenhouse gas (GHG) emissions. We utilize a global Computable General Equilibrium (CGE) model which consists of interaction of energy commodities with explicit biofuels and their by-product sectors, land endowment classified by agro-ecological zones, and emission of four major GHGs - carbon dioxide, methane, nitrous oxide, fluorinated gases from agricultural and economic activities, including emissions associated with biofuel feedstock, crop conversion to fuel, and land cover conversion through change in ecosystem carbon stock. This study also pays special attention to pasture-crop and Conservative Reserve Program land due to their potential sectoral competition for land. In this paper, we examine the proposed policies for biofuels expansion in the US, EU and Brazil, as well as alternative potential trajectories of larger and smaller growth, including a collapse of the traditional biofuels market. The impact on GHG emissions are decomposed and associated with the individual drivers behind the biofuels boom, including: changes in subsidies, rising oil prices, and other major policy drivers.

Suggested Citation

  • Birur, Dileep K. & Golub, Alla A. & Hertel, Thomas W. & Rose, Steven K., 2009. "The Economy-wide Greenhouse Gas Impacts of the Biofuels Boom (or Bust)," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49473, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea09:49473
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    File URL: http://purl.umn.edu/49473
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    Keywords

    Biofuels; Renewable Energy; Computable General Equilibrium (CGE); Agro Ecological Zones (AEZs); Land use change; Greenhouse Gas Emission.; Environmental Economics and Policy; International Relations/Trade; Land Economics/Use; Resource /Energy Economics and Policy; C68; Q18; Q42; R14;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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