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From a rise in B to a fall in C? SVAR analysis of environmental impact of biofuels

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This is the first paper that econometrically estimates the impact of rising Bioenergy production on global CO2 emissions. We apply a structural vector autoregression (SVAR) approach to time series from 1961 to 2009 with annual observation for the world biofuel production and global CO2 emissions. We find that in the medium- to long-run biofuels reduce global CO2 emissions: the CO2 emission elasticities with respect to biofuels range between -0.57 and -0.80. In the short-run, however, biofuels may increase CO2 emissions temporarily. Our findings complement those of life-cycle assessment and simulation models. However, by employing a more holistic approach and obtaining more robust estimates of environmental impact of biofuels, our results are particularly valuable for policy makers.

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  • Pavel Ciaian & d’Artis Kancs & Giuseppe Piroli & Miroslava Rajcaniova, 2015. "From a rise in B to a fall in C? SVAR analysis of environmental impact of biofuels," JRC Working Papers JRC95503, Joint Research Centre (Seville site).
  • Handle: RePEc:ipt:iptwpa:jrc95503
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    Cited by:

    1. Bilgili, Faik & Koçak, Emrah & Bulut, Ümit & Kuşkaya, Sevda, 2017. "Can biomass energy be an efficient policy tool for sustainable development?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 830-845.
    2. Rahman, Farahiyah Abdul & Aziz, Md Maniruzzaman A. & Saidur, R. & Bakar, Wan Azelee Wan Abu & Hainin, M.R & Putrajaya, Ramadhansyah & Hassan, Norhidayah Abdul, 2017. "Pollution to solution: Capture and sequestration of carbon dioxide (CO2) and its utilization as a renewable energy source for a sustainable future," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 112-126.
    3. Ko, Chun-Han & Chaiprapat, Sumate & Kim, Lee-Hyung & Hadi, Pejman & Hsu, Shu-Chien & Leu, Shao-Yuan, 2017. "Carbon sequestration potential via energy harvesting from agricultural biomass residues in Mekong River basin, Southeast Asia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 1051-1062.
    4. repec:eee:eneeco:v:64:y:2017:i:c:p:170-176 is not listed on IDEAS
    5. repec:prg:jnlpol:v:2018:y:2018:i:2:id:1185:p:218-239 is not listed on IDEAS
    6. Gohin, Alexandre, 2016. "Understanding the revised CARB estimates of the land use changes and greenhouse gas emissions induced by biofuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 402-412.

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    Keywords

    time-series econometrics; biofuels; CO2 emissions; environment; agriculture; indirect land use changes;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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