A spatial equilibrium analysis of using agricultural resources to produce biofuel

Chih-Chun Kung and Tao Wu
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Chih-Chun Kung: School of Economics, Jiangxi University of Finance and Economics, Nanchang, China

Agricultural Economics, 2020, vol. 66, issue 2, 74-83

Abstract: In order to alleviate the potential damage from climate change and fulfil the requirements contracted in the Paris Agreement (COP 24), China has promulgated the mandatory regulation on ethanol-blend gasoline to reduce current levels of CO2 emissions. Since large-scale bioenergy development involves various aspects such as feedstock selection (energy crops, crop wastes), technology alternatives (conventional and cellulosic ethanol, pyrolysis), government subsidy (land use, energy crop subsidy) and carbon trade mechanism, an analysis that integrates economic, environmental, and social effects is necessary to explore the optimal biofuel strategy and social effects. This study proposes a price endogenous, partial equilibrium mathematical programming model to investigate how the selection of bioenergy crops and bioenergy technologies influences the amount of net bioenergy production, carbon sequestration, government subsidies, and cultivation patterns. We show that the conjunctive use of agricultural wastes can be an effective addition to current biofuel production. The results also indicate that at high gasoline and emissions prices, more land used for the energy crop program results in a significant change in government expenditure. In addition, net emissions reduction and emissions offset efficiency can vary substantially when different bioenergy techniques are adopted.

Keywords: carbon offset; ethanol; mathematical programming; resource utilisation; sustainability (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:66:y:2020:i:2:id:201-2019-agricecon

DOI: 10.17221/201/2019-AGRICECON

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