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Biofuels, Poverty, and Growth: A Computable General Equilibrium Analysis of Mozambique

Channing Arndt (), Rui M.S. Benfica, Finn Tarp (), James Thurlow and Rafael Uaiene ()

No 52004, 2009 Conference, August 16-22, 2009, Beijing, China from International Association of Agricultural Economists

Abstract: This paper assesses the implications of large-scale investments in biofuels for growth and income distribution. We find that biofuels investment enhances growth and poverty reduction despite some displacement of food crops by biofuels. Overall, the biofuel investment trajectory analyzed increases Mozambique’s annual economic growth by 0.6 percentage points and reduces the incidence of poverty by about six percentage points over a 12-year phase-in period. Benefits depend on production technology. An outgrower approach to producing biofuels is more pro-poor, due to the greater use of unskilled labor and accrual of land rents to smallholders, compared with the more capital-intensive plantation approach. Moreover, the benefits of outgrower schemes are enhanced if they result in technology spillovers to other crops. These results should not be taken as a green light for unrestrained biofuels development. Rather, they indicate that a carefully designed and managed biofuels policy holds the potential for substantial gains.

Keywords: Agricultural and Food Policy; International Development; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Date: 2008
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Related works:
Journal Article: Biofuels, poverty, and growth: a computable general equilibrium analysis of Mozambique (2010) Downloads
Working Paper: Biofuels, poverty, and growth: A computable general equilibrium analysis of Mozambique (2008) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae09:52004

DOI: 10.22004/ag.econ.52004

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