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Land Use Change Impacts of Biofuels: Near-VAR Evidence from the US

Giuseppe Piroli (), Pavel Ciaian and d'Artis Kancs

No EERI_RP_2011_11, EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: The present paper studies the land use change impacts of fuels and biofuels. We test the theoretical hypothesis, which says that changes in fuel prices cause changes in land use both directly and indirectly and, because of price inter-dependencies, biofuels reinforce the land use change impacts. Our data consists of yearly observations extending from 1950 to 2007 for the US, to which we apply time-series analytical mechanisms of five major traded agricultural commodities, the area of cultivated agricultural land and crude oil price. The empirical findings confirm that markets for crude oil and cultivated agricultural land are interdependent: an increase in oil price by 1 dollar/barrel increases land use between 54 and 68 thousand hectares. We also find that the rise of bioenergy sector accelerates land use change in the US.

Keywords: Near-VAR; energy; bioenergy; prices; land use; biofuel support policies. (search for similar items in EconPapers)
JEL-codes: C14 C22 C51 D58 Q11 Q13 Q42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
Date: 2011-08-11
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Journal Article: Land use change impacts of biofuels: Near-VAR evidence from the US (2012) Downloads
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