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Impacts of large-scale expansion of biofuels on global poverty and income distribution

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  • Cororaton, Caesar B.
  • Timilsina, Govinda R.

Abstract

This paper analyzes the impact of large-scale expansion of biofuels on the global income distribution and poverty. A global computable general equilibrium model is used to simulate the effects of the expansion of biofuels on resource allocation, commodity prices, factor prices and household income. A second model based on world-wide household surveys uses these results to calculate the impacts on poverty and global income inequality. The study finds that the large-scale expansion of biofuels leads to an increase in production and prices of agricultural commodities. The increased prices would cause higher food prices, especially in developing countries. Moreover, wages of unskilled rural labor would also increase, which slows down the rural to urban migration in many developing countries. The study also shows that the effects on poverty vary across regions; it increases in South Asia and Sub-Saharan Africa, whereas it decreases in Latin America. At the global level, the expansion of biofuels increases poverty slightly.

Suggested Citation

  • Cororaton, Caesar B. & Timilsina, Govinda R., 2012. "Impacts of large-scale expansion of biofuels on global poverty and income distribution," Policy Research Working Paper Series 6078, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6078
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    Cited by:

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    2. Condon, Nicole & Klemick, Heather & Wolverton, Ann, 2015. "Impacts of ethanol policy on corn prices: A review and meta-analysis of recent evidence," Food Policy, Elsevier, vol. 51(C), pages 63-73.
    3. Miranda, Mario J. & Farrin, Kathleen M. & Larson, Donald F. & Chen, Shu-Ling, 2013. "Differential Effects of Food Security Policies on Subsistence Farmers and the Urban Poor," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149736, Agricultural and Applied Economics Association.
    4. Pena-Levano, Luis M & Rasetti, Michele & Melo, Grace, 2016. "Interaction of biofuel, food security, indirect land use change and greenhouse mitigation policies in the European Union," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236075, Agricultural and Applied Economics Association.
    5. Ehsanreza Sajedinia & Wallace E. Tyner, 2021. "Use of General Equilibrium Models in Evaluating Biofuels Policies," World Scientific Book Chapters, in: Peter Dixon & Joseph Francois & Dominique van der Mensbrugghe (ed.), POLICY ANALYSIS AND MODELING OF THE GLOBAL ECONOMY A Festschrift Celebrating Thomas Hertel, chapter 14, pages 437-465, World Scientific Publishing Co. Pte. Ltd..
    6. Sajedinia, Ehsanreza & Tyner, Wally, 2017. "Use of General Equilibrium Models in Evaluating Biofuels Policies," Conference papers 332885, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Deppermann, Andre & Offermann, Frank & Grethe, Harald, 2014. "Income effects of EU biofuel policies in Germany," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182803, European Association of Agricultural Economists.
    8. Deppermann, Andre & Offermann, Frank & Puttkammer, Judith & Grethe, Harald, 2016. "EU biofuel policies: Income effects and lobbying decisions in the German agricultural sector," Renewable Energy, Elsevier, vol. 87(P1), pages 259-265.

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    Keywords

    Rural Poverty Reduction; Food&Beverage Industry; Regional Economic Development; Economic Theory&Research; Labor Policies;
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