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Biofuels, Tax Policies and Oil Prices in France: Insights from a Dynamic CGE Model

Author

Listed:
  • Virginie Doumax-Tagliavini
  • Jean-Marc Philip
  • Cristina Sarasa

Abstract

The 2009 Renewable Energies Directive (RED) has set up ambitious targets concerning biofuel consumption in the European Union by 2020. Nevertheless, budgetary constraints and growing concerns about the environmental integrity of first-generation biofuels have imposed a phasing out of the fiscal instruments to promote them. Focusing on France, this paper combines an exogenous increase in oil prices and tax policies on fossil fuels. The objective is to determine the efficiency of an alternative incentive scheme for biodiesel consumption based on a higher price of the fossil fuel substitute. Policy simulations are implemented through a dynamic computable general equilibrium (CGE) model calibrated on 2009 French data. The results show that the 10% biodiesel mandate set by the RED would not be achieved even if the fixed taxes on diesel reach the same level as those on gasoline. Although integrating the rise in oil prices into the fiscal framework improves the biodiesel penetration rate, it remains slightly below the target. Moreover, we find that the effects of biofuel consumption are limited to the biofuel chain sectors. In other agricutural sectors, the substitution effect of biodiesel with diesel is partially offset by the pricing effect induced by higher energy production costs. see above See above

Suggested Citation

  • Virginie Doumax-Tagliavini & Jean-Marc Philip & Cristina Sarasa, 2013. "Biofuels, Tax Policies and Oil Prices in France: Insights from a Dynamic CGE Model," EcoMod2013 6245, EcoMod.
  • Handle: RePEc:ekd:004912:6245
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    References listed on IDEAS

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    Cited by:

    1. Virginie Doumax-Tagliavini & Cristina Sarasa, University of Zaragoza, 2014. "Biofuels, technological change and uncertainty: Evidence from France," EcoMod2014 6941, EcoMod.
    2. Cristina Sarasa & Virginie Doumax, 2015. "Impact of biofuels production on GHG emissions: What to address and how to approach them?," EcoMod2015 8626, EcoMod.
    3. Elizondo, Alejandra & Boyd, Roy, 2017. "Economic impact of ethanol promotion in Mexico: A general equilibrium analysis," Energy Policy, Elsevier, vol. 101(C), pages 293-301.

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    Keywords

    France; Energy and environmental policy; Energy and environmental policy;

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