Efficiency of a Biofuel Subsidy Policy in the Presence of Environmental Externalities

Basak Bayramoglu

No 44399, 2008 International Congress, August 26-29, 2008, Ghent, Belgium from European Association of Agricultural Economists

Abstract: The object of this paper is to analyze, in a general equilibrium setting with four markets, the efficiency of a biofuel subsidy policy. The analysis takes into account environmental externalities associated both with the production and the consumption of biofuels, as well as associated with the production of agricultural raw material. Our preliminary numerical results, applied to the biodiesel subsidy policy in France, first show that this policy increases the utility of the representative consumer compared to the laissez-faire solution. The same policy action leads, however, to an increased level of agricultural and GHG emissions, in comparison with the laissez-faire solution.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 16
Date: 2008
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae08:44399

DOI: 10.22004/ag.econ.44399

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