Biofuels for all? Understanding the Global Impacts of Multinational Mandates

Thomas Hertel, Wallace Tyner and Dileep Birur ()

GTAP Working Papers from Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University

Abstract: 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 among 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.

Date: 2008
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
Note: GTAP Working Paper No. 51
References: Add references at CitEc
Citations: View citations in EconPapers (48)

Downloads: (external link)
https://www.gtap.agecon.purdue.edu/resources/res_display.asp?RecordID=2809 (text/html)

Related works:
Working Paper: Biofuels for all? Understanding the Global Impacts of Multinational Mandates (2008)
Working Paper: Biofuels for all? Understanding the Global Impacts of Multinational Mandates (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gta:workpp:2809

Access Statistics for this paper

More papers in GTAP Working Papers from Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University Contact information at EDIRC.
Bibliographic data for series maintained by Jeremy Douglas ().