An Economic Evaluation of US Biofuel Expansion Using the Biofuel Breakeven Program with GHG Accounting

Alicia Rosburg and John Miranowski

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: We present results from an application of the Biofuel Breakeven program (BioBreak) to 14 US cellulosic ethanol markets that vary by feedstock and location. BioBreak estimates the economic costs of cellulosic biofuel production for each market and identifies the necessary conditions to sustain long-run markets. Based on current market conditions, our results suggest that long-run cellulosic ethanol production is not sustainable without significant government intervention or high long-run oil prices ($135-$170 per barrel). Using life-cycle analysis for cellulosic ethanol and conventional gasoline, we extend the BioBreak program results to derive an implicit value of reduced greenhouse gas emissions embodied in cellulosic ethanol. For the markets considered in our analysis, sustaining cellulosic ethanol production is equivalent to valuing the reduction in CO2 equivalents between $141 and $282 per metric ton.

Keywords: biofuel; Biofuel policies; biomass; carbon tax; cellulosic ethanol; Greenhouse gas emissions; life-cycle analysis; renewable fuel standard (search for similar items in EconPapers)
Date: 2013-04-15
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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Citations: View citations in EconPapers (3)

Published in AgBioForum 2011, vol. 14 no. 3, pp. 111-119

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