How far should we go to sugarcoat the path to global energy security?

Rômulo N. Ely () and Michael Lahr ()
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Rômulo N. Ely: Rutgers Business School, Rutgers - The State University of New Jersey

Annals of Operations Research, 2024, vol. 333, issue 1, No 13, 392 pages

Abstract: Abstract Since the 1970s, Brazil has carried out the most successful world program of commercial biomass for use and production of energy by stimulating its sugarcane industry and promoting the large-scale production of ethanol nationwide in response to the first oil shock. Today, the technologies behind ethanol production are well established. Brazil is the world’s largest sugarcane supplier, producing its ethanol at a competitive price. If other sugarcane producing countries decided to join Brazil’s move toward the production of this biofuel, what impacts might there be for each country’s economy and employment? This is what we investigate in this paper. Prime candidates for ethanol production include Australia, China, Colombia, India, Indonesia, Mexico, Pakistan, the Philippines, Thailand, and the United States of America. We evaluated the potential socioeconomic impacts of developing this promising industry by using an input–output approach. More specifically, we adapted the Brazilian method of producing ethanol to these countries’ distinct economies. We augmented the input–output table of each country, inserting a new ethanol industry based on the Brazilian ethanol production model. We also augmented their new ethanol industry’s sales following a hypothetical hydrous and anhydrous ethanol consumption scenario. Thereafter, we reconcile the national accounts, concluding our analysis by quantifying and comparing the different net effects of this new industry for each of the assessed countries for the year of 2009. We demonstrate which industries would be expected to be positively or negatively impacted by this substitution in each country; and find that not all of the countries we assessed would experience positive socioeconomic results from emulating Brazil’s production of ethanol.

Keywords: Sugarcane; Ethanol; Input–output analysis; Impact analysis; Economic development; Employment (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10479-023-05666-y

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