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Economic and Environmental Effects of the European Biofuel Policy

Author

Listed:
  • Rasetti, Michele
  • Ferreira, Joaquim B.S., Filho
  • Finco, Adele
  • Pena-Levano, Luis M.
  • Zhao, Xin
  • Opgrand, Jeffrey

Abstract

For many years, biofuels have been considered a cleaner, greener alternative to fossil fuels in order to reduce greenhouse gas (GHG) emissions in the transportation sector. For this reason, in recent years, many European policies has tried to promote biofuels production and consumption. However, some concerns on the actual sustainability of biofuels have arisen. In particular, scientific studies have pointed out that additional emissions from indirect land-use change (ILUC) could cancel out biofuels benefits on climate change. This paper analyzes the global economic and environmental consequences of an increase in biofuel production, as established by the RE Directive, for the period 2001-2020. The GTAP-BIO general equilibrium model was used for the simulation. The results suggest a total emission of 168 gCO2/MJ per year over 20 years of biodiesel production, which would mean that the GHG reduction requirements established by the policies could not be fulfilled.

Suggested Citation

  • Rasetti, Michele & Ferreira, Joaquim B.S., Filho & Finco, Adele & Pena-Levano, Luis M. & Zhao, Xin & Opgrand, Jeffrey, 2015. "Economic and Environmental Effects of the European Biofuel Policy," 2015 Conference, August 9-14, 2015, Milan, Italy 212489, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae15:212489
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    File URL: http://ageconsearch.umn.edu/record/212489/files/Rasetti-Economic%20and%20environmental%20effects%20of%20the%20European%20biofuel%20policy-265.pdf
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    References listed on IDEAS

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    1. Birur, Dileep & Hertel, Thomas & Tyner, Wally, 2008. "Impact of Biofuel Production on World Agricultural Markets: A Computable General Equilibrium Analysis," GTAP Working Papers 2413, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    2. McDougall, Robert & Alla Golub, 2007. "GTAP-E: A Revised Energy-Environmental Version of the GTAP Model," GTAP Research Memoranda 2959, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    3. 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.
    4. Sohngen, Brent & Tennity, Colleen & Hnytka, Marc & Meeusen, Karl, 2008. "Global Forestry Data for the Economic Modeling of Land Use," GTAP Working Papers 2602, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    5. Joaquim Bento de Souza Ferreira Filho & Mark Horridge, 2011. "Ethanol expansion and indirect land use change in Brazil," Working Papers 0114, Universidade Federal do ParanĂ¡, Department of Economics.
    6. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    7. Demirbas, Ayhan, 2009. "Political, economic and environmental impacts of biofuels: A review," Applied Energy, Elsevier, vol. 86(Supplemen), pages 108-117, November.
    8. Taheripour, Farzad & Tyner, Wallace E., 2011. "Global Land Use Changes and Consequent CO2 Emissions due to US Cellulosic Biofuel Program: A Preliminary Analysis," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103559, Agricultural and Applied Economics Association.
    9. Delzeit, Ruth & Lange, Mareike, 2011. "Biofuel policies and indirect land use change," Kiel Policy Brief 37, Kiel Institute for the World Economy (IfW).
    10. Monica Padella & Adele Finco & Wallace E. Tyner, 2012. "Impacts of Biofuels Policies in the EU," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 3).
    11. Taheripour, Farzad & Tyner, Wallace E., 2010. "Land Use Implications of Biofuel Production in the Presence of Idled Cropland and Crop Yield Improvement: Analytical and Numerical General Equilibrium Analyses," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61720, Agricultural and Applied Economics Association.
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    Keywords

    Environmental Economics and Policy; Land Economics/Use;

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