Impact of Switching Production to Bioenergy Crops: The Switchgrass Example January 2005
This paper reports the results of a series of simulations that evaluate the general equilibrium effects of substituting crude oil by biomass, specifically switchgrass, in the production of petroleum in the USA. The simulations are inspired by debates over the implications for developing countries if agricultural policies in the USA are changed so that agricultural land is transferred from the production of cereals and other crops to biomass production. The results confirm expectations that such a policy shift would raise cereal and other agricultural prices, due to a general reduction in food production in the USA. However, the reduction in the demand for crude oil in the USA causes terms of trade effects that more than offset any potential benefits for developing countries due to the depreciation of their exchange rates, causing a general decline in economic welfare. Moreover, the declines in welfare are proportionately greater for developing countries due to their small levels of production of the commodities whose prices increase with the change in USA agricultural production.
|Date of creation:||Jan 2005|
|Date of revision:||Jan 2005|
|Contact details of provider:|| Postal: |
Phone: +44 114 222 3399
Fax: + 44 (0)114 222 3458
Web page: http://www.shef.ac.uk/economics
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lewis, Jeffrey D. & Robinson, Sherman & Wang, Zhi, 1995.
"Beyond the Uruguay Round: The implications of an Asian free trade area,"
China Economic Review,
Elsevier, vol. 6(1), pages 35-90.
- Lewis, Jeffrey D. & Robinson, Sherman & Zhi Wang, 1995. "Beyond the Uruguay Round : the implications of an Asian free trade area," Policy Research Working Paper Series 1467, The World Bank.
- Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, April.
- Pyatt, Graham, 1991. "SAMs, the SNA and National Accounting Capabilities," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(2), pages 177-98, June.
- Pyatt, Graham & Round, Jeffrey I, 1977. "Social Accounting Matrices for Development Planning," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 23(4), pages 339-64, December.
- Devaragan, Shantayanan & Lewis, Jeffrey D. & Robinson, Sherman, 1990. "Policy lessons from trade-focused, two-sector models," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 625-657.
When requesting a correction, please mention this item's handle: RePEc:shf:wpaper:2005002. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jacob Holmes)
If references are entirely missing, you can add them using this form.