Cost effectiveness of bio-ethanol to reduce carbon dioxide emissions in Greece

Md. I. Haque, Stelios Rozakis, A. Natsis, M. Walker and K. Mizak
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Md. I. Haque: Agricultural Economics and Rural Development Department, Agricultural University of Athens
A. Natsis: Department of Natural Resources Management and Agricultural Engineering, Agricultural University of Athens, Greece
M. Walker: Institute of Soil and Plant Science, Pulawy, Poland
K. Mizak: Institute of Soil and Plant Science, Pulawy, Poland

No 2011-3, Working Papers from Agricultural University of Athens, Department Of Agricultural Economics

Abstract: The purpose of this study is to evaluate ethanol cost- effectiveness with regards to carbon dioxide emissions. Actually, bio-fuel production is only viable thanks to the tax credit policy resulting in economic ‘deadweight’ loss. The environmental performance is assessed under the Life Cycle Assessment (LCA) framework. Economic burden to society to support the activity divided by avoided CO2 equivalent emissions indicates the bio-ethanol cost effectiveness. Agricultural feedstock supply that comprises of sugarbeets, grains and industrial processing sub-models are articulated in a regional sector model. The maximization of total welfare determines optimal crop mix for farmers and the best configurations for industry. This is illustrated for bio-ethanol produced by the ex-sugar industry in Thessaly, Greece. Life cycle activity analysis showed that, at the optimum, CO2 emission is reduced between 1 and 1.5 t of carbon dioxide equivalent per ton of ethanol. The unitary cost falls in the range of 100 to 250 euro per ton of CO2 and it is remarkably dependent on the agricultural policy scenario.

Keywords: Cost effectiveness; ethanol; mathematical programming; life cycle assessment; greenhouse gases (search for similar items in EconPapers)
JEL-codes: C61 Q2 Q58 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2011
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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