Modeling Biofuels Expansion in a Changing Global Environment

May Peters, Agapi Somwaru, James M. Hansen, Ralph Seeley and Steve Dirkse

No 51732, 2009 Conference, August 16-22, 2009, Beijing, China from International Association of Agricultural Economists

Abstract: This paper examines the impact of declining energy prices on biofuels production and use and its implications to agricultural commodity markets. It uses PEATSim, a dynamic partial equilibrium, multi-commodity, multi-country global trade model of the agriculture sector to analyze the interaction between biofuel, crop and livestock sectors. The ability of countries to achieve their energy goals will be affected by future direction of petroleum prices. A 50 percent decline in petroleum prices (absent of mandates) would result in rapid decline in biofuel use worldwide accompanied by a decline in feedstock and biofuel prices. About a 21 percent decline in U.S. cost of ethanol production is needed to make ethanol competitive with gasoline and to offset the effect of lower energy prices.

Keywords: Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 20
Date: 2009-08
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae09:51732

DOI: 10.22004/ag.econ.51732

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