Building a Bioethanol Market in Mexico

H. Nunez

No 275921, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists

Abstract: This article aims to develop a framework to forecast bioethanol policies impacts a decade ahead in Mexico, where there have been several attempts to introduce biofuels into the market but so far no success. Technically, an endogenous-price mathematical programming model is developed emphasizing the Mexican agricultural and fuel sectors, which are embedded in a multi-region, multi-product, spatial partial equilibrium model of the world economy. There is a module for the U.S. and another for ROW. Mexico is disaggregated into 193 crop districts. Production functions are specified for 14 major crops and pasture. Bioethanol can be produced both from a dedicated crop and from agroindustrial residues. Three policy alternatives are considered as well as a base case in which, as now, liquid fuels are all derived from fossil sources. The rest alternative consists of subsidies to biofuel producers, the second of blending mandates and the third of both combined. Biofuel imports are allowed in all cases. Results show some losses for fuel and agricultural consumers, that are not o set by both ethanol producer and GHG emissions reduction gains. This suggests that some compensating redistribution may be needed if these policies are to be seen as politically sustainable.

Keywords: Crop Production/Industries; International Relations/Trade; Marketing (search for similar items in EconPapers)
Pages: 43
Date: 2018-07
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae18:275921

DOI: 10.22004/ag.econ.275921

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