Ethanol Plant Location and Land Use: A Case Study of CRP and the Ethanol Mandate

Jennifer Ifft, Deepak Rajagopal and Ryan Weldzuis

Applied Economic Perspectives and Policy, 2019, vol. 41, issue 1, 37-55

Abstract: This study uses a county‐level difference‐in‐difference framework to estimate the share of re‐enrollment into the Conservation Reserve Program (CRP) in response to local ethanol production capacity after the Renewable Fuels Standard (RFS). Relatively more land remained in CRP in ethanol‐intensive areas after the RFS. This seemingly counter‐intuitive result can be explained by post‐RFS changes to the CRP that favored ethanol‐intensive areas. Both CRP design changes and production trends correlated with ethanol plant location pose challenges for empirical strategies that use ethanol plant location to study production or land use decisions. Changes to CRP policies can play an important role in participation and land use decisions.

Date: 2019
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https://doi.org/10.1093/aepp/ppy007

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Persistent link: https://EconPapers.repec.org/RePEc:wly:apecpp:v:41:y:2019:i:1:p:37-55

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