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Cost effectiveness of bio-ethanol to reduce carbon dioxide emissions in Greece

Author

Listed:
  • Md. I. Haque

    (Agricultural Economics and Rural Development Department, Agricultural University of Athens)

  • Stelios Rozakis

    () (Agricultural Economics and Rural Development Department, Agricultural University of Athens)

  • A. Natsis

    (Department of Natural Resources Management and Agricultural Engineering, Agricultural University of Athens, Greece)

  • M. Borzecka-Walker

    (Institute of Soil and Plant Science, Pulawy, Poland)

  • K. Mizak

    (Institute of Soil and Plant Science, Pulawy, Poland)

Abstract

The purpose of this study is to evaluate ethanol cost- effectiveness with regards to carbon dioxide emissions. Actually, bio-fuel production is only viable thanks to the tax credit policy resulting in economic ‘deadweight’ loss. The environmental performance is assessed under the Life Cycle Assessment (LCA) framework. Economic burden to society to support the activity divided by avoided CO2 equivalent emissions indicates the bio-ethanol cost effectiveness. Agricultural feedstock supply that comprises of sugarbeets, grains and industrial processing sub-models are articulated in a regional sector model. The maximization of total welfare determines optimal crop mix for farmers and the best configurations for industry. This is illustrated for bio-ethanol produced by the ex-sugar industry in Thessaly, Greece. Life cycle activity analysis showed that, at the optimum, CO2 emission is reduced between 1 and 1.5 t of carbon dioxide equivalent per ton of ethanol. The unitary cost falls in the range of 100 to 250 euro per ton of CO2 and it is remarkably dependent on the agricultural policy scenario.

Suggested Citation

  • Md. I. Haque & Stelios Rozakis & A. Natsis & M. Borzecka-Walker & K. Mizak, 2011. "Cost effectiveness of bio-ethanol to reduce carbon dioxide emissions in Greece," Working Papers 2011-3, Agricultural University of Athens, Department Of Agricultural Economics.
  • Handle: RePEc:aua:wpaper:2011-3
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    File URL: http://aoatools.aua.gr/RePEc/aua/wpaper/files/2011_03_rozakis.pdf
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    References listed on IDEAS

    as
    1. Murphy, J.D. & McCarthy, K., 2005. "Ethanol production from energy crops and wastes for use as a transport fuel in Ireland," Applied Energy, Elsevier, vol. 82(2), pages 148-166, October.
    2. Russi, Daniela, 2008. "An integrated assessment of a large-scale biodiesel production in Italy: Killing several birds with one stone?," Energy Policy, Elsevier, vol. 36(3), pages 1169-1180, March.
    3. Haque, Imdadul & Rozakis, Stelios & Ganko, Ewa & Kallivroussis, Leonidas, 2009. "Bio-energy production in the sugar industry: an integrated modeling approach," 113th Seminar, September 3-6, 2009, Chania, Crete, Greece 58026, European Association of Agricultural Economists.
    4. 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.
    5. Nguyen, Thu Lan T. & Gheewala, Shabbir H. & Garivait, Savitri, 2007. "Fossil energy savings and GHG mitigation potentials of ethanol as a gasoline substitute in Thailand," Energy Policy, Elsevier, vol. 35(10), pages 5195-5205, October.
    6. Iliopoulos, Constantine & Rozakis, Stelios, 2010. "Environmental cost-effectiveness of bio diesel production in Greece: Current policies and alternative scenarios," Energy Policy, Elsevier, vol. 38(2), pages 1067-1078, February.
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    More about this item

    Keywords

    Cost effectiveness; ethanol; mathematical programming; life cycle assessment; greenhouse gases;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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