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Optimal Mix of Feedstock for Biofuels: Implications for Land Use and GHG Emissions

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  • Wang, Weiwei
  • Khanna, Madhu
  • Dwivedi, Puneet

Abstract

Increasing concerns about energy security and climate change mitigation have led to significant policy support for biofuels, particularly for cellulosic biofuels. This paper examines the short- and long-run effects of Renewable Fuel Standard (RFS) on the mix of biofuel feedstocks, food, fuel and wood markets and land use change by using an economic model that integrates the agriculture, forest and transportation fuel sectors. Our results show that RFS would lead to the production of about 1600 billion liters of corn ethanol over the 2010-2035 periods, which could constitute a maximum of two-thirds of the cumulative biofuel production; the remaining mandate is met by advanced biofuels. The logging and milling residues are the primary initial providers of biomass feedstocks. After year 2025, energy crops and crop residues will play the leading role in cellulosic feedstocks production. Producing these biofuels will not cause significant land use change between and within agricultural and forest sector as compared to the business-as-usual (BAU) case. While the RFS could significantly affect production, exports and prices of crop and livestock commodities relative to the BAU case, its impacts on the forest sector is found to be relatively small except for pulpwood related products in the long term. Overall, the RFS reduces cumulative social welfare over 2010-2035 periods by $78.8 Billion relative to the BAU case.

Suggested Citation

  • Wang, Weiwei & Khanna, Madhu & Dwivedi, Puneet, 2013. "Optimal Mix of Feedstock for Biofuels: Implications for Land Use and GHG Emissions," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150736, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:150736
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    File URL: http://purl.umn.edu/150736
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    References listed on IDEAS

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    1. Chen, Xiaoguang & Huang, Haixiao & Khanna, Madhu & Önal, Hayri, 2014. "Alternative transportation fuel standards: Welfare effects and climate benefits," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 241-257.
    2. Ince, Peter J. & Kramp, Andrew D. & Skog, Kenneth E. & Yoo, Do-il & Sample, V. Alaric, 2011. "Modeling future U.S. forest sector market and trade impacts of expansion in wood energy consumption," Journal of Forest Economics, Elsevier, vol. 17(2), pages 142-156, April.
    3. Hayri Önal & Bruce A. McCarl, 1991. "Exact Aggregation in Mathematical Programming Sector Models," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 39(2), pages 319-334, July.
    4. Xiaoguang Chen & Hayri Önal, 2012. "Modeling Agricultural Supply Response Using Mathematical Programming and Crop Mixes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 674-686.
    5. White, Eric M. & Latta, Greg & Alig, Ralph J. & Skog, Kenneth E. & Adams, Darius M., 2013. "Biomass production from the U.S. forest and agriculture sectors in support of a renewable electricity standard," Energy Policy, Elsevier, vol. 58(C), pages 64-74.
    6. Xiaoguang Chen & Haixiao Huang & Madhu Khanna & Hayri Önal, 2011. "Meeting the Mandate for Biofuels: Implications for Land Use, Food, and Fuel Prices," NBER Chapters,in: The Intended and Unintended Effects of U.S. Agricultural and Biotechnology Policies, pages 223-267 National Bureau of Economic Research, Inc.
    7. repec:wsi:ccexxx:v:03:y:2012:i:03:n:s2010007812500121 is not listed on IDEAS
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    Keywords

    Environmental Economics and Policy; Resource /Energy Economics and Policy;

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