Biofuels
and long-term land use dynamics (2008)
by Woltjer,
Geert
From the GTAP Eleventh Annual
Conference: Future of the Global Economy - June 12 -14
2008
This paper investigates opportunities to improve the land market in
GTAP. Different theoretical foundations for land supply, land substitution and
land intensification are investigated and related with the current approaches
for land use modeling in GTAP. With the help of a simple mathematical model the
issues are illustrated and an implementation of the ideas in the GTAP model is
described. Simple results with a biofuels scenario are presented.
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Biofuels
and their By-Products: Global Economic and Environmental Implications
(2008)
by Taheripour,
Farzad, Thomas
Hertel, Wally
Tyner, Jayson
Beckman and Dileep
Birur
From the GTAP Eleventh Annual
Conference: Future of the Global Economy - June 12 -14
2008
Several papers have used general equilibrium models and addressed
the economy-wide and environmental consequences of producing biofuels at a large
scale. These papers mainly argue that since biofuels are mostly produced from
agricultural sources, their effects are largely felt in agricultural markets
with major land use and environmental consequences. In this paper, we argue that
virtually all of these studies have overstated the impact of liquid biofuels on
agricultural markets due to the fact that they have ignored the role of
by-products resulting from the production of biofuels.
The importance of
incorporating by-products of biofuel production in economic models is well
recognized by some partial equilibrium analyses of biofuel production. However,
this issue has not been tackled by those conducting CGE analysis of biofuels
programs. Accordingly, this paper explicitly introduces Dried Distillers Grains
with Solubles (DDGS), the major by-product of grain based ethanol, into the GTAP
database and modifies the GTAP-E model to analyze the economic and environmental
impacts of regional and international mandate policies designed to stimulate
bioenergy production and use in the US and EU. Unlike many CGE models which are
characterized by single product sectors, here grain based ethanol and DDGS
jointly are produced by one industry.
We show that models with and
without DDGS demonstrate different portraits from the economic impacts of
international biofuel mandates for the world economy in 2015. While both models
demonstrate significant changes in the agricultural production pattern across
the world, the model with DDGS shows smaller changes in the production of cereal
grains and larger changes for oilseeds products in the US. In the presence of
DDGS, prices change more generously due to the mandate policies. Finally, we
show that incorporating DDGS into the model significantly changes the land use
consequences of the biofuel mandate polices.
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BioFuels
and Trade: World Agricultural Market Impacts (2008)
by Stillman,
Richard, Agapi
Somwaru, May Peters and Edwin Young
From the GTAP Eleventh Annual
Conference: Future of the Global Economy - June 12 -14
2008
Increased use of agricultural commodities in the production of
biofuels has led to rapid increases in commodity prices in the U.S. and the
world. In 2006 agricultural commodity market prices increased dramatically and
have remained at high level. Expansion in corn-ethanol plants rapidly has
increased the demand for corn and will exercise an upward pressure on commodity
prices until alternative biofuel production can be sourced from a much wider
variety of feedstock. In this paper we analyze the impacts of world-wide policy
induced demand on agricultural commodity production, use, and prices. We look at
alternative scenarios and use of various policy instruments to access the
possible impact of biofuels on the agricultural sector globally and capture the
links between the markets for oil, biofuels, feedstock, and the by-products of
biofuel processing.
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Biofuels
for all? Understanding the Global Impacts of Multinational Mandates
(2008)
by Hertel,
Thomas, Wally
Tyner and Dileep
Birur
From the GTAP Eleventh Annual
Conference: Future of the Global Economy - June 12 -14
2008
The recent rise in world oil prices, coupled with heightened
interest in the abatement of greenhouse gas emissions, has led to a sharp
increase in domestic biofuels production around the world. Previous authors have
devoted considerable attention to the impacts of these policies on a
country-by-country basis. However, there are also strong interactions between
these programs, as they compete in world markets for feedstocks and ultimately
for a limited supply of global land. In this paper, we evaluate the interplay
between two of the largest biofuels programs, namely the renewable fuel mandates
in the US and the EU. We examine how the presence of each of these programs
influences the other, and also how their combined impact influences global
markets and land use around the world.
We begin with an analysis of the
origins of the recent bio-fuel boom, using the historical period from 2001-2006
for purposes of model validation. This was a period of rapidly rising oil
prices, increased subsidies in the EU, and, in the US, there was a ban on the
major competitor to ethanol for gasoline additives. Our analysis of this
historical period permits us to evaluate the relative contribution of each of
these factors to the global biofuel boom. We also use this historical simulation
to establish a 2006 benchmark biofuel economy from which we conduct our analysis
of future mandates.
Our prospective analysis of the impacts of the
biofuels boom on commodity markets focuses on the 2006-2015 time period, during
which existing investments and new mandates in the US and EU are expected to
substantially increase the share of agricultural products (e.g., corn in the US,
oilseeds in the EU, and sugar in Brazil) utilized by the biofuels sector. In the
US, this share could more than double from 2006 levels, while the share of
oilseeds going to biodiesel in the EU could triple.
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Biofuels
Mandates, Land Use and Global Greenhouse Gas Emissions (2008)
by Golub,
Alla, Thomas
Hertel, Steven
Rose and Brent
Sohngen
From the GTAP Eleventh Annual
Conference: Future of the Global Economy - June 12 -14
2008
There is significant policy interest in liquid biofuels with
appealing prospects for energy security, farm security, poverty alleviation, and
climate change. Large-scale commercial biofuel production could have far
reaching implications for regional and global markets – particularly those
related to energy and land use. As such, large-scale biofuels programs are
likely to have significant impacts on global greenhouse gas (GHG) emissions.
This paper develops a novel global CGE model with explicit biofuel and land
markets and greenhouse gas emissions and carbon stocks. The model is able to
estimate the effects on the broad range of input and output markets potentially
affected globally by biofuels policies. Using the model, we evaluate the market,
land-use, and emissions implications of a range of biofuel volume mandates. We
find… We then introduce additional methods for (1) estimating the dynamic
implications of biofuels policies for global forests, and (2) evaluating the
interaction between biofuels policies and GHG mitigation opportunities in order
to identify complementarities and potentially reinforcing policies.
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Biofuels,
Poverty, and Growth: A Computable General Equilibrium Analysis of
Mozambique (2008)
by Arndt,
Channing, Rui Benfica, Finn
Tarp, James
Thurlow and Rafael Uaiene
From the GTAP Eleventh Annual
Conference: Future of the Global Economy - June 12 -14
2008
Large investments in bio-fuels are currently in process in
Mozambique. This analysis seeks to assess the macroeconomic implications of
biofuels investment for growth and income distribution using an economywide
framework. Results suggest that biofuels provide Mozambique with an opportunity
to substantially enhance economic growth and poverty reduction. The primary
biofuels scenario modeled here results in increases in the average annual
economic growth rate of 0.6% and reductions in poverty incidence by six
percentage points at the end of a 12 year phase in period. Institutional
arrangements and production technologies matter. We find that an outgrower
approach is much more strongly pro-poor due to greater use of unskilled labor
and the accrual of land rents to smallholders compared with a plantation
approach. The growth and poverty reduction benefits of outgrower schemes are
further enhanced if the schemes result in technology spillovers to other crops.
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Brazilian
structural adjustment to rapid growth in fuel ethanol demand
(2008)
by Giesecke,
James, Mark
Horridge and Jose
Antonio Scaramucci
From the GTAP Eleventh Annual
Conference: Future of the Global Economy - June 12 -14
2008
In response to oil price rises and carbon emission concerns,
policies promoting increased ethanol usage in gasoline blends are considered by
many countries, including major energy users such as USA, EU and Japan. As a
result, Brazil, as the largest sugar ethanol producer and exporter in the world,
can expect growing foreign demand for ethanol exports. Also, the introduction of
flex-fuel vehicles in Brazil is causing domestic sales of ethanol to increase
steadily. In this paper, we investigate the regional and industrial economic
consequences of rapid growth in Brazilian ethanol domestic consumption and
exports. For this, we use a disaggregated multi-regional (top down) computable
general equilibrium (CGE) model with energy industry detail. Our modelling
emphasises a number of features of ethanol production in Brazil which we expect
to be important in determining the adjustment of its regional economies to a
substantial expansion in ethanol production. These include regional differences
in ethanol and sugar production technologies, sugarcane harvesting methods and
the elasticity of land supply to sugarcane production. Some of the conclusions
are as follows. (i) Debate on the prospects for the Brazilian ethanol industry
often places a high weight on export growth. Yet, in our simulations, growth in
domestic ethanol demand will be the major influence on the Brazilian economy, at
least to 2020. (ii) The pressure for further land clearance is often associated
with a rapid ethanol growth scenario. But only a small (less than 2%) reduction
in land use by other agriculture is necessary to accommodate the required
expansion in ethanol production. Food production is equally affected by the
appreciation of real exchange rate (Dutch disease effect) and growth of the
light-duty vehicle fleet. (iii) Tight enforcement of a nation-wide ban on manual
harvesting could reduce the ability of some (poor) regional economies to
participate in the benefits of growth in ethanol production.
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