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A dynamic model of food and clean energy

Author

Listed:
  • Ujjayant Chakravorty

    (LERNA - Economie des Ressources Naturelles - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - CEA - Commissariat à l'énergie atomique et aux énergies alternatives, UCF - University of Central Florida [Orlando])

  • Bertrand Magne

    (LERNA - Economie des Ressources Naturelles - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - CEA - Commissariat à l'énergie atomique et aux énergies alternatives, CEA - Commissariat à l'énergie atomique et aux énergies alternatives)

  • Michel Moreaux

    (LERNA - Economie des Ressources Naturelles - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - CEA - Commissariat à l'énergie atomique et aux énergies alternatives, UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse)

Abstract

In the midwestern United States, ethanol produced from corn is mixed with gasoline to meet clean air standards. Allocating land to produce clean fuel means taking away land from farming. We examine a model in which a scarce fossil fuel (e.g., oil) causes pollution but may be substituted by a clean fuel produced from land. Methodologically, we extend the Hotelling model to consider a substitute produced in the agricultural sector. We discover a range of prices within which the land-based fuel may substitute for the fossil fuel. When land is abundant, the supply of the clean fuel may exhibit multiple discontinuities. Environmental regulation may cause food production and farm prices to remain constant for a period of time.

Suggested Citation

  • Ujjayant Chakravorty & Bertrand Magne & Michel Moreaux, 2008. "A dynamic model of food and clean energy," Post-Print hal-02660216, HAL.
    • Handle: RePEc:hal:journl:hal-02660216
    DOI: 10.1016/j.jedc.2007.04.009
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    Cited by:

    1. Amigues, Jean-Pierre & Moreaux, Michel, 2016. "The Joint Dynamics of the Energy Mix, Land Uses and Energy Efficiency Rates During the Transition Toward the Green Economy," TSE Working Papers 16-625, Toulouse School of Economics (TSE).
    2. Ujjayant Chakravorty & Marie-Hélène Hubert & Michel Moreaux, 2010. "Politiques pro-biocarburants et climatique américaines : impact sur les choix énergétiques du Brésil et des Etats-Unis et bilan carbone," Revue économique, Presses de Sciences-Po, vol. 61(1), pages 213-247.
    3. Andrade de Sá, Saraly & Daubanes, Julien, 2016. "Limit pricing and the (in)effectiveness of the carbon tax," Journal of Public Economics, Elsevier, vol. 139(C), pages 28-39.
    4. Bahel, Eric & Marrouch, Walid & Gaudet, Gérard, 2013. "The economics of oil, biofuel and food commodities," Resource and Energy Economics, Elsevier, vol. 35(4), pages 599-617.
    5. Chen, Xiaoguang & Huang, Haixiao & Khanna, Madhu & Önal, Hayri, 2014. "Alternative transportation fuel standards: Welfare effects and climate benefits," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 241-257.
    6. Mads Greaker & Michael Hoel & Knut Einar Rosendahl, 2014. "Does a Renewable Fuel Standard for Biofuels Reduce Climate Costs?," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(3), pages 337-363.
    7. Saraly Andrade de Sa & Julien Daubanes, 2014. "Limit-Pricing and the (Un)Effectiveness of the Carbon Tax," Working Papers 2014.07, FAERE - French Association of Environmental and Resource Economists.
    8. Yongyang Cai & Kenneth Judd & Jevgenijs Steinbuks, 2017. "A nonlinear certainty equivalent approximation method for dynamic stochastic problems," Quantitative Economics, Econometric Society, vol. 8(1), pages 117-147, March.
    9. Ujjayant Chakravorty & Marie‐Hélène Hubert & Michel Moreaux & Linda Nøstbakken, 2017. "Long‐Run Impact of Biofuels on Food Prices," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 733-767, July.
    10. Ujjayant Chakravorty & Marie-Helene Hubert & Michel Moreaux, 2014. "Land Allocation between Food and Energy," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 9(1), pages 52-69, March.
    11. Andrade de Sá, Saraly & Daubanes, Julien, 2016. "Limit pricing and the (in)effectiveness of the carbon tax," Journal of Public Economics, Elsevier, vol. 139(C), pages 28-39.

    More about this item

    Keywords

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    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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