A dynamic model of food and clean energy

Ujjayant Chakravorty (), Bertrand Magne and Michel Moreaux
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Bertrand Magne: LERNA - Economie des Ressources Naturelles - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - CEA - Commissariat à l'énergie atomique et aux énergies alternatives, CEA - Commissariat à l'énergie atomique et aux énergies alternatives

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Abstract: In the midwestern United States, ethanol produced from corn is mixed with gasoline to meet clean air standards. Allocating land to produce clean fuel means taking away land from farming. We examine a model in which a scarce fossil fuel (e.g., oil) causes pollution but may be substituted by a clean fuel produced from land. Methodologically, we extend the Hotelling model to consider a substitute produced in the agricultural sector. We discover a range of prices within which the land-based fuel may substitute for the fossil fuel. When land is abundant, the supply of the clean fuel may exhibit multiple discontinuities. Environmental regulation may cause food production and farm prices to remain constant for a period of time.

Keywords: HOTELLING THEORY; LAND USE; AGRICULTURE; ENVIRONMENTAL REGULATION; POLLUTION (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (13)

Published in Journal of Economic Dynamics and Control, 2008, 32 (4), pp.1181-1203. ⟨10.1016/j.jedc.2007.04.009⟩

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Related works:
Journal Article: A dynamic model of food and clean energy (2008)
Working Paper: A Dynamic Model of Food and Clean Energy (2006)
Working Paper: A dynamic model of food and clean energy (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02660216

DOI: 10.1016/j.jedc.2007.04.009

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