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The causes of two-way U.S.–Brazil ethanol trade and the consequences for greenhouse gas emission

Deepayan Debnath, Jarrett Whistance and Wyatt Thompson

Energy, 2017, vol. 141, issue C, 2045-2053

Abstract: Biofuel policies in the U.S. and Brazil can influence two-way ethanol trade, in which the countries export to and import from each other simultaneously. A multi-market, multi-region partial equilibrium economic model is used to assess the interactions of the biofuel policies and markets of these two countries. The market effects are converted to greenhouse gas (GHG) emission effects using calculations that include the emissions associated with the transportation of ethanol between Brazil and the U.S. Results show that under certain conditions ethanol and feedstock producer prices decrease in a “No Renewable Fuel Standard (RFS)” scenario, while GHG emission could rise. If the RFS is maintained in the U.S., but Brazilian gasoline prices are allowed to move freely with rising global crude oil prices, then ethanol and feedstock prices increase and GHG emissions decrease as the use of ethanol increases. We find that two-way ethanol trade can have important, if moderate, GHG emission impacts.

Keywords: Feedstocks price; Green house gas (GHG) emissions; Renewable Fuel Standard; Simulation; Structural economic model; Two-way ethanol trade (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:energy:v:141:y:2017:i:c:p:2045-2053