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Land use change impacts of biofuels: Near-VAR evidence from the US

Giuseppe Piroli (), Pavel Ciaian and d'Artis Kancs

Ecological Economics, 2012, vol. 84, issue C, 98-109

Abstract: The present paper studies the land use change impacts of fuels and biofuels. We test the theoretical hypothesis, which says that changes in fuel prices cause changes in land use both directly and indirectly and that, because of price inter-dependencies, biofuels reinforce the land use change impacts. We apply time-series analytical mechanisms to five major traded agricultural commodities, the cultivated area of agricultural land and crude oil price. Our data consists of yearly observations extending from 1950 to 2007 for the US. The empirical findings confirm that markets for crude oil and cultivated agricultural land are interdependent: an increase in oil price by 1dollar/barrel increases land use between 54,000 and 68,000ha. We also find that the increase of bioenergy sector accelerates land use change in the US, i.e. food commodities are being substituted for bioenergy crops.

Keywords: Near-VAR; Energy; Bioenergy; Prices; Land use; Biofuel policies; Climate change (search for similar items in EconPapers)
JEL-codes: C14 C22 C51 C61 D58 Q11 Q13 Q42 (search for similar items in EconPapers)
Date: 2012
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Working Paper: Land Use Change Impacts of Biofuels: Near-VAR Evidence from the US (2011) Downloads
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