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Land Use Change Impacts of Biofuels: Near-VAR Evidence from the US

  • Giuseppe Piroli
  • Pavel Ciaian
  • d'Artis Kancs

The present paper studies the land use change impacts of fuels and biofuels. We test the theoretical hypothesis, which says that changes in fuel prices cause changes in land use both directly and indirectly and, because of price inter-dependencies, biofuels reinforce the land use change impacts. Our data consists of yearly observations extending from 1950 to 2007 for the US, to which we apply time-series analytical mechanisms of five major traded agricultural commodities, the area of cultivated agricultural land and crude oil price. The empirical findings confirm that markets for crude oil and cultivated agricultural land are interdependent: an increase in oil price by 1 dollar/barrel increases land use between 54 and 68 thousand hectares. We also find that the rise of bioenergy sector accelerates land use change in the US.

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Paper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI_RP_2011_11.

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Date of creation: 11 Aug 2011
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Handle: RePEc:eei:rpaper:eeri_rp_2011_11
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  1. Gardner Bruce, 2007. "Fuel Ethanol Subsidies and Farm Price Support," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-22, December.
  2. Pavel Ciaian & d'Artis Kancs & Miroslava Rajcaniova, 2012. "Bioenergy and Global Land Use Change," EERI Research Paper Series EERI_RP_2012_12, Economics and Econometrics Research Institute (EERI), Brussels.
  3. Ciaian, Pavel & Kancs, d'Artis, 2011. "Interdependencies in the energy-bioenergy-food price systems: A cointegration analysis," Resource and Energy Economics, Elsevier, vol. 33(1), pages 326-348, January.
  4. d’Artis Kancs, 2007. "Applied General Equilibrium Analysis of Renewable Energy Policies," EERI Research Paper Series EERI_RP_2007_02, Economics and Econometrics Research Institute (EERI), Brussels.
  5. Thomas W. Hertel & Wallace E. Tyner & Dileep K. Birur, 2010. "The Global Impacts of Biofuel Mandates," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 75-100.
  6. Julda Kielyte, 2008. "Estimating Panel Data Models in the Presence of Endogeneity and Selection," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 51(2), pages 1-19.
  7. 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 12881, Iowa State University, Department of Economics.
  8. Swinton, Scott M. & Babcock, Bruce A. & James, Laura K. & Bandaru, Varaprasad, 2011. "Higher US crop prices trigger little area expansion so marginal land for biofuel crops is limited," Energy Policy, Elsevier, vol. 39(9), pages 5254-5258, September.
  9. Swinton, Scott & Babcock, Bruce A. & James, Laura K. & Bandaru, Varaprasad, 2011. "Higher U.S. Crop Prices Trigger Little Area Expansion So Marginal Land for Biofuels is Limited," Staff General Research Papers 34897, Iowa State University, Department of Economics.
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