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Supporting Cellulosic Ethanol Biomass Production and its Impact on Land Use Conversion

Feng Wu and Zhengfei Guan

No 49451, 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin from Agricultural and Applied Economics Association

Abstract: One of the problems facing the cellulosic ethanol industry is the cellulose material supply. The U.S. forestlands have considerable potential to become one of the main sources of biomass to meet the 2022 renewable fuel target. Focusing on the land exiting the Conservation Reserve Program (CRP), the article finds that few landowners are willing to convert their land to forestland after the CRP contract is expired. Our econometric estimates show the choice decision is responsive to net returns of land use alternatives, especially cropland. Two policy initiatives are suggested to provide direct incentives for land use change. The nested logit estimates are used to simulate landowners‘ responses to policy mechanism. The results show that subsidies can substantially increase forestland, although a spillover effect exists.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-env
Date: 2009-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea09:49451

DOI: 10.22004/ag.econ.49451

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