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Author: Suhail Ahmad (S.M.)
Publisher:
ISBN:
Category :
Languages : en
Pages : 65
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Book Description
The use of biofuels in domestic transportation sector in the United States and European Union is attributed mainly to the binding mandates, Renewable Fuel Standard in the US and European Directive on the Promotion of Renewable Energy in the EU. The mandates have triggered production of first generation technologies that have been around for centuries and use food crops like corn or sugarcane as inputs and the second generation technologies that are still being developed but rely on cellulose or waste material. This raises important questions, what are the implications of policy mandates and biofuel production on land use change, global food crop prices and fuel blend technology as the binding mandates will rely mainly on first generation fuel technologies for the foreseeable future. Most analysis of policy mandates and biofuel production technologies leave out the land use change impact assessment. To investigate the questions I focus on how the mandates in the US and EU interact with land use. I use a computable general equilibrium framework, the MIT Emissions Prediction and Policy Analysis (EPPA) model, which captures full economy-wide impacts of policy mandates and land use. I have developed a mechanism to integrate the first and second generation technologies, the transportation sector, and land use for policy impact analysis. I simulated the policy mandates through a permit trading system which is constrained by the blend wall technology of the underlying vehicle transportation fleet. I find that the global biofuel crop land requirement over 2005 to 2030 time frame is 44 percent higher with the mandates. The land requirement is met primarily by the reallocation of non-biofuel crop land and partially by pasture, natural grass and harvested forest lands. The long term food crop prices increase by less than 1% per year with mandates as land productivity improvements dampen the impact of biofuel production on prices. In the case of global biofuel free-trade Brazil becomes the largest producer which reduces the deforestation in Brazil by 7 percent. I also find that fuel blend-wall acts as an implicit constraint on the domestic biofuel use as it limits the total vehicle fuel consumption.
Author: Suhail Ahmad (S.M.)
Publisher:
ISBN:
Category :
Languages : en
Pages : 65
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Book Description
The use of biofuels in domestic transportation sector in the United States and European Union is attributed mainly to the binding mandates, Renewable Fuel Standard in the US and European Directive on the Promotion of Renewable Energy in the EU. The mandates have triggered production of first generation technologies that have been around for centuries and use food crops like corn or sugarcane as inputs and the second generation technologies that are still being developed but rely on cellulose or waste material. This raises important questions, what are the implications of policy mandates and biofuel production on land use change, global food crop prices and fuel blend technology as the binding mandates will rely mainly on first generation fuel technologies for the foreseeable future. Most analysis of policy mandates and biofuel production technologies leave out the land use change impact assessment. To investigate the questions I focus on how the mandates in the US and EU interact with land use. I use a computable general equilibrium framework, the MIT Emissions Prediction and Policy Analysis (EPPA) model, which captures full economy-wide impacts of policy mandates and land use. I have developed a mechanism to integrate the first and second generation technologies, the transportation sector, and land use for policy impact analysis. I simulated the policy mandates through a permit trading system which is constrained by the blend wall technology of the underlying vehicle transportation fleet. I find that the global biofuel crop land requirement over 2005 to 2030 time frame is 44 percent higher with the mandates. The land requirement is met primarily by the reallocation of non-biofuel crop land and partially by pasture, natural grass and harvested forest lands. The long term food crop prices increase by less than 1% per year with mandates as land productivity improvements dampen the impact of biofuel production on prices. In the case of global biofuel free-trade Brazil becomes the largest producer which reduces the deforestation in Brazil by 7 percent. I also find that fuel blend-wall acts as an implicit constraint on the domestic biofuel use as it limits the total vehicle fuel consumption.
Author: Deepak Rajagopal
Publisher: Now Publishers Inc
ISBN: 1601981740
Category : Business & Economics
Languages : en
Pages : 131
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Book Description
Environmental, Economic and Policy Aspects of Biofuels provides a timely summary of the current issues contributing to the policy debates on this emerging and important topic. The authors make several key conclusions: - Biofuels are diverse and evolving. The next generation of biofuels has the potential to provide improved net benefits but requires significant technological breakthroughs. - Greenhouse gas (GHG) benefits vary significantly across various types of biofuels and are dependent on market conditions and policy situation. - While biofuel improves the welfare of gasoline consumers and food producers, it has a significant negative affect on food consumers, especially the poor. - A diverse set of policies, which have been introduced or proposed, impact biofuels directly including subsidies, mandates, and regulation of carbon content of fuels. However, current policies do not provide incentives that align private and social welfare. - Much of the impact assessments of biofuels thus far are ex-ante estimates based on either optimization or equilibrium models. There is a lack of ex-post econometric analysis of the marginal impact of biofuels and biofuel policies on the economy. And the structural relationships between agriculture, the energy sector, and the environment in the context of biofuels have hardly been studied. The biofuel policy debate is likely to be an ongoing one in the near future and Environmental, Economic and Policy Aspects of Biofuels should be required reading for anyone interested in understanding this diverse and growing literature.
Author:
Publisher:
ISBN:
Category : Biomass energy
Languages : en
Pages : 58
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Book Description
Biofuel production is being promoted through various policies such as mandates and tax credits. This paper uses a dynamic, spatial, multi-market equilibrium model, Biofuel and Environmental Policy Analysis Model (BEPAM), to estimate the effects of these policies on cropland allocation, food and fuel prices, and the mix of biofuels from corn and cellulosic feedstocks over the 2007-2022 period. We find that the biofuel mandate will increase corn price by 24%, reduce the price of gasoline by 8% in 2022, and increase social welfare by $122 B (0.7%) relative to Business As Usual scenario. The provision of volumetric tax credits that accompany the mandate significantly changes the mix of biofuels produced in favor of cellulosic biofuels and reduces the share of corn ethanol in the cumulative volume of biofuels produced from 50% to 10%. The tax credits reduce the adverse impact of the mandate alone on crop prices and decrease the price of biofuels. However, they impose a welfare cost of $79 B compared to the mandate alone. These results are found to be sensitive to the rate of growth of crop productivity, the costs of production of bioenergy crops, and the availability of marginal land for producing bioenergy crops.
Author: Xiaoguang Chen
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Biofuels have been promoted to achieve energy security and as a solution to reducing greenhouse gas (GHG) emissions from the transportation sector. This dissertation presents a framework to examine the extent to which biofuel policies reduce gasoline consumption and GHG emissions and their implications for land allocation among food and fuel crops, food and fuel prices and social welfare. It first develops a stylized model of the food and fuel sectors linked by a limited land availability to produce food and fuel crops. It then analyzes the mechanisms through which biofuel mandates and subsidies affect consumer choices and differ from a carbon tax policy. A dynamic, multi-market equilibrium model, Biofuel and Environmental Policy Analysis Model (BEPAM), is developed to estimate the welfare costs of these policies and to explore the mix of biofuels from corn and various cellulosic feedstocks that are economically viable over the 2007-2022 period under alternative policies. It distinguishes biofuels produced from corn and several cellulosic feedstocks including crop residues (corn stover and wheat straw) and bioenergy crops (miscanthus and switchgrass). A crop productivity model MISCANMOD is used to simulate the yields of miscanthus and switchgrass. The biofuel policies considered here include the biofuel mandate under the Renewable Fuel Standard (RFS), various biofuel subsidies and import tariffs. The effects of these policies are compared to those of a carbon tax policy that is directly targeted to reduce GHG emissions. The stylized model shows that a carbon tax can reduce gasoline consumption and lower GHG emissions, and is likely to increase biofuel consumption with a higher elasticity of substitution between gasoline and biofuels and an elastic supply of gasoline. A biofuel mandate would reduce gasoline consumption, but the effects on GHG emissions depend on parameters in the fuel sector, such as the demand elasticity of miles, the elasticity of substitution between gasoline and biofuels and the supply elasticity of gasoline. A biofuel mandate accompanied with subsidies would create incentives to increase the consumption of the blended fuel by lowering its price. Gasoline consumption and GHG emissions would increase under the mandate and subsidy relative to a mandate alone. The numerical simulation is used to analyze the impacts of biofuel mandate and subsidies relative to a carbon tax. We find a biofuel mandate alone leads to a welfare gain of 0.1% while reducing GHG emissions by 1% relative to a carbon tax of $30 per ton of CO2e (Carbon dioxide equivalent). However, it would increase corn and soybean prices in 2022 by 19% and 20% relative to the carbon tax. The provision of biofuel subsidies that accompany the mandate under the RFS significantly changes the mix of bofuels in favor of cellulosic biofuels produced from high yielding perennial grasses and reduces the adverse impact of RFS alone on food prices. Biofuel mandates and subsidies also reduce GHG emissions by 3% relative to the carbon tax but at a welfare cost of $106 B relative to the tax. To meet the cellulosic biofuel mandates, a mix of feedstocks (corn stover, wheat straw, switchgrass and miscanthus) is used, where the mix differs over time, with biofuels from miscanthus meeting about 90% of the cellulosic ethanol produced between 2007- 2022. Corn stover comes primarily from the plain states while wheat straw is collected mainly in the central and northern plains and western mountain states. Production of miscanthus is more concentrated in the Great Plains and in the Midwest and along lower reaches of the Mississippi river. Switchgrass, though not as competitive as miscanthus in terms of yields and costs of production in most parts of the country, is still produced in a significant amount in northern and central Texas and Wisconsin where miscanthus yields are relatively low. We then analyze the implications of imposing import tariffs on biofuels for social welfare and GHG emissions in an open economy considering trade in biofuels. When biofuel mandates and subsidies are in place, the imposition of import tariffs would significantly reduce the imports of sugarcane ethanol by 28% relative to biofuel mandates and subsidies. It also results in a higher GHG intensity of the blended fuel and marginally increases GHG emissions but raises social welfare by 0.01% relative to biofuel mandates and subsidies.
Author: Xiaoguang Chen
Publisher:
ISBN:
Category :
Languages : en
Pages : 60
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Book Description
Biofuel production is being promoted through various policies such as mandates and tax credits. This paper uses a dynamic, spatial, multi-market equilibrium model, Biofuel and Environmental Policy Analysis Model (BEPAM), to estimate the effects of these policies on cropland allocation, food and fuel prices, and the mix of biofuels from corn and cellulosic feedstocks over the 2007-2022 period. We find that the biofuel mandate will increase corn price by 24%, reduce the price of gasoline by 8% in 2022, and increase social welfare by $122 B (0.7%) relative to Business As Usual scenario. The provision of volumetric tax credits that accompany the mandate significantly changes the mix of biofuels produced in favor of cellulosic biofuels and reduces the share of corn ethanol in the cumulative volume of biofuels produced from 50% to 10%. The tax credits reduce the adverse impact of the mandate alone on crop prices and decrease the price of biofuels. However, they impose a welfare cost of $79 B compared to the mandate alone. These results are found to be sensitive to the rate of growth of crop productivity, the costs of production of bioenergy crops, and the availability of marginal land for producing bioenergy crops.
Author: Govinda R. Timilsina
Publisher: Springer
ISBN: 149390518X
Category : Business & Economics
Languages : en
Pages : 159
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Book Description
Interest in biofuels began with oil shocks in the 1970’s, but the more rapid development and consumption of biofuel industry in recent years has been primarily driven by mandates, subsidies, climate change concerns, emissions targets and energy security. From 2004 to 2006, fuel ethanol grew by 26% and biodiesel grew by 172%. As biofuel production continues to expand, investments in capacity expansion and research and development have been made. The 2008 food crisis emphasized the need to re-examine biofuel consequences. Biofuels remain an important renewable energy resource to substitute for fossil fuels, particularly in the transportation sector, yet biofuels’ success is still uncertain. The future of biofuels in the energy supply mix relies on mitigating potential and improving the environmental gains. This book brings together leading authorities on biofuel from the World Bank to examine all of the impacts of biofuel (economic, social, environmental) within a unified framework and in a global perspective, making it of interest to academics in agricultural and environmental economics as well as industry and policy-makers.
Author: Justin Scott Baker
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This dissertation explores the combined effects of biofuel mandates and terrestrial greenhouse gas GHG mitigation incentives on land use, management intensity, commodity markets, welfare, and the full costs of GHG abatement through conceptual and empirical modeling. First, a simple conceptual model of land allocation and management is used to illustrate how bioenergy policies and GHG mitigation incentives could influence market prices, shift the land supply between alternative uses, alter management intensity, and boost equilibrium commodity prices. Later a major empirical modeling section uses the U.S. Forest and Agricultural Sector Optimization Model with Greenhouse Gases (FASOMGHG) to simulate land use and production responses to various biofuel and climate policy scenarios. Simulations are performed to assess the effects of imposing biofuel mandates in the U.S. consistent with the Renewable Fuels Standard of the Energy Independence and Security Act of 2007 (RFS2). Simulations are run for several climate mitigation policy scenarios (with varying GHG (CO2) prices and eligibility restrictions for GHG offset activities) with and without conservation land recultivation. Important simulation outputs include time trajectories for land use, GHG emissions and mitigation, commodity prices, production, net exports, sectoral economic welfare, and shifts in management practices and intensity. Direct and indirect consequences of RFS2 and carbon policy are highlighted, including regional production shifts that can influence water consumption and nutrient use in regions already plagued by water scarcity and quality concerns. Results suggest that the potential magnitude of climate mitigation on commodity markets and exports is substantially higher than under biofuel expansion in isolation, raising concerns of international leakage and stimulating the "Food vs. Carbon" debate. Finally, a reduced-form dynamic emissions trading model of the U.S. economy is developed using simulation output from FASOMGHG and the National Energy Modeling System to test the effect of biofuel mandate expansion and domestic offset eligibility restrictions on total economy-wide GHG abatement costs. Findings are that while the RFS2 raises the marginal costs of offsets, full abatement costs depend on a number of policy factors. GHG payment incentives for forest management and non-CO2 agricultural offsets can increase full abatement costs by more than 20%.
Author: National Research Council
Publisher: National Academies Press
ISBN: 0309187516
Category : Technology & Engineering
Languages : en
Pages : 416
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Book Description
In the United States, we have come to depend on plentiful and inexpensive energy to support our economy and lifestyles. In recent years, many questions have been raised regarding the sustainability of our current pattern of high consumption of nonrenewable energy and its environmental consequences. Further, because the United States imports about 55 percent of the nation's consumption of crude oil, there are additional concerns about the security of supply. Hence, efforts are being made to find alternatives to our current pathway, including greater energy efficiency and use of energy sources that could lower greenhouse gas (GHG) emissions such as nuclear and renewable sources, including solar, wind, geothermal, and biofuels. The United States has a long history with biofuels and the nation is on a course charted to achieve a substantial increase in biofuels. Renewable Fuel Standard evaluates the economic and environmental consequences of increasing biofuels production as a result of Renewable Fuels Standard, as amended by EISA (RFS2). The report describes biofuels produced in 2010 and those projected to be produced and consumed by 2022, reviews model projections and other estimates of the relative impact on the prices of land, and discusses the potential environmental harm and benefits of biofuels production and the barriers to achieving the RFS2 consumption mandate. Policy makers, investors, leaders in the transportation sector, and others with concerns for the environment, economy, and energy security can rely on the recommendations provided in this report.
Author: Perrihan Al Riffai
Publisher:
ISBN:
Category :
Languages : en
Pages : 54
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Book Description
Author: Donald Mitchell
Publisher: World Bank Publications
ISBN: 0821385178
Category : Business & Economics
Languages : en
Pages : 220
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Book Description
A new economic opportunity for sub-Saharan Africa is looming large: biofuel production. Rapidly rising energy prices are expected to remain high for an extended period of time because of the increasing demand in prospering and populous countries such as China and India, the depletion of easily accessible supplies of crude oil, and concern over global climate change. As a result, there is renewed interest in biofuels as an alternative to fossil fuels. Africa is uniquely positioned to produce these new cash crops for both domestic use and export. The region has abundant land resources and preferential access to protected markets with higher-than-world-market prices. The rapid growth in the demand for transport fuels in Africa and high fuel prices create domestic markets for biofuels. The European Union and the United States have approved legislation that requires large increases in the consumption of biofuels over at least the next decade. Imports are expected to be needed to meet these mandates, thus opening the door to African and other developing countries that can produce biofuels or feedstocks for biofuels competitively. Expanding the production of crops for biofuels will affect the entire rural sector in Africa as resources are shifted away from traditional crops and the prices of all agricultural commodities rise. Even smallholders can participate in producing biofuel crops. To promote the sustainability and significant contribution of this enterprise, Biofuels in Africa provides guidance in formulating suitable policy regimes, which are based on protecting the rights of current land users, developing revenue-sharing schemes with local communities, safeguarding the environment and biodiversity, expanding institutional capacity, formulating new regulations and procedures, and emulating best practices from experienced countries. This volume will be of value to anyone interested in biofuels, including policy makers, development practitioners, private investors, researchers, and the general public. Now that African countries are trying to significantly increase their energy supply systems, biofuels are an attractive option using both dedicated crops and agricultural waste. This book provides guidance for them to develop a suitable policy regime for a significant contribution by biofuels. Professor Ogunlade R. Davidson, Minister of Energy and Water Resources, Sierra Leone Biofuels in Africa is a sorely needed resource for our understanding of the problems of expanding biofuels production in Africa. A high point of the book is a description of the projects that were started in several countries. A very useful book! Professor Jos Goldemberg, University of S o Paulo, Brazil As Africa most likely will play the same role for global biofuels as the Middle East does for oil, this comprehensive book on African biofuels should be compulsory reading for anyone interested in either African development or biofuels. The book captures the essence of long-term drivers and opportunities as well the complex challenges for investors and society of this huge emerging industry. Per Carstedt, Executive Chairman, EcoEnergy Africa
