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Biofuels and economic development in Tanzania

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  • Arndt, Channing
  • Pauw, Karl
  • Thurlow, James

Abstract

Biofuels provide a new opportunity to enhance economic development in Tanzania. Drawing on detailed cost estimates, we develop a dynamic computable general equilibrium model to estimate the impact of different biofuel production scenarios on growth and poverty. Our results indicate that maximizing the poverty-reducing effects of a biofuels industry in Tanzania requires engaging and improving the productivity of smallholder farmers. Evidence shows that cassava-based ethanol production is more profitable than other feedstock options. Our findings also indicate that cassava generates higher levels of pro-poor growth than do sugarcane-based systems. However, if smallholder yields can be improved rather than expanding cultivated land, then sugarcane and cassava outgrower schemes can produce similar pro-poor outcomes. We conclude that in so far as the public investments needed to establish a biofuels industry in Tanzania are in accordance with national development plans, producing biofuels will contribute to achieving the countrys overall development objectives.

Suggested Citation

  • Arndt, Channing & Pauw, Karl & Thurlow, James, 2010. "Biofuels and economic development in Tanzania," IFPRI discussion papers 966, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:966
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    References listed on IDEAS

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    1. Klaus Deininger, 2003. "Land Policies for Growth and Poverty Reduction," World Bank Publications - Books, The World Bank Group, number 15125, December.
    2. Coyle, William T., 2007. "The Future of Biofuels: A Global Perspective," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-6, November.
    3. Derek Headey & Shenggen Fan, 2008. "Anatomy of a crisis: the causes and consequences of surging food prices," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 375-391, November.
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    5. Arndt, Channing & Benfica, Rui & Tarp, Finn & Thurlow, James & Uaiene, Rafael, 2010. "Biofuels, poverty, and growth: a computable general equilibrium analysis of Mozambique," Environment and Development Economics, Cambridge University Press, vol. 15(1), pages 81-105, February.
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    Cited by:

    1. Gatete, Charly & Dabat, Marie-Helene, 2014. "Développement des agrocarburants en Afrique de l’Ouest. Une analyse institutionnelle comparative," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 344(November-).
    2. Vang Rasmussen, Laura & Rasmussen, Kjeld & Birch-Thomsen, Torben & Kristensen, Søren B.P. & Traoré, Oumar, 2012. "The effect of cassava-based bioethanol production on above-ground carbon stocks: A case study from Southern Mali," Energy Policy, Elsevier, vol. 41(C), pages 575-583.
    3. Ferede, Tadele & Gebreegziabher, Zenebe & Mekonnen, Alemu & Guta, Fantu & Levin, Jörgen & Köhlin, Gunnar, 2013. "Biofuels, Economic Growth, and the External Sector in Ethiopia: A Computable General Equilibrium Analysis," RFF Working Paper Series dp-13-08-efd, Resources for the Future.
    4. François Joseph Cabral & Fatou Cissé & Abdoulaye Diagne & Msangi Siwa, 2017. "Global Biofuel Production and Poverty in Senegal," Economics Bulletin, AccessEcon, vol. 37(3), pages 1435-1449.
    5. Faße, Anja & Winter, Etti & Grote, Ulrike, 2014. "Bioenergy and rural development: The role of agroforestry in a Tanzanian village economy," Ecological Economics, Elsevier, vol. 106(C), pages 155-166.

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    Keywords

    Biofuels; Cassava; Computable general equilibrium (CGE) model; Growth; Poverty;
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