Impact of Biofuel Production on World Agricultural Markets: A Computable General Equilibrium Analysis

GTAP Working Paper, 2007

136 citations recorded by the source corpus.

This paper introduces biofuels sectors as energy inputs into the GTAP data base and to the production and consumption structures of the GTAP-Energy model developed by Burniaux and Truong (2002), and further modified by McDougall and Golub (2008). We also incorporate Agro-ecological Zones (AEZs) for each of the land using sectors in line with Lee et al. (2005). The GTAP-E model with biofuels and AEZs offers a useful framework for analyzing the growing importance of biofuels for global changes in crop production, utilization, commodity prices, factor use, trade, land use change etc. We begin by validating the model over the 2001-2006 period. We focus on six main drivers of the biofuel boom: the hike in crude oil prices, replacement of MTBE by ethanol as a gasoline additive in the US, and subsidies for ethanol and biodiesel in the US and EU. Using this historical simulation, we calibrate the key elasticities of energy substitution between biofuels and petroleum products in each region. With these parameter settings in place, the model does a reasonably good job of predicting the share of feedstock in biofuels and related sectors in accordance with the historical evidence between 2001 and 2006 in the three major biofuel producing regions: US, EU, and Brazil. The results from the historical simulation reveal an increased production of feedstock with the replacement of acreage under other agricultural crops. As expected, the trade balance in oil sector improves for all the oil exporting regions, but it deteriorates at the aggregate for the agricultural sectors.

Subfields: Biomedical Engineering, Environmental Engineering, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/0377792cf7d1e086193c94ca0110469ad3b529e2

Citations in the corpus

• The impacts of biofuel targets on land-use change and food supply: a global CGE assessment (2010, unknown): “Birur et al. (2008) use the GTAP database developed by Lee et al. (2005) and (2008) to analyze the impact of biofuel production on global agricultural markets.”
• Integrating Bioenergy into Computable General Equilibrium Models – A Survey (2010, unknown): “With regard to crop area, the results indicate that area is being diverted from other uses to coarse grain cultivation in the US, oilseed cultivation in the EU and sugarcane cultivation in Brazil (cf. Table 8 in Birur et al., 2008, p.48).”
• ECONOMIC AND PHYSICAL MODELING OF LAND USE IN GCAM 3.0 AND AN APPLICATION TO AGRICULTURAL PRODUCTIVITY, LAND, AND TERRESTRIAL CARBON (2014, unknown): “constrained optimization approach to modeling land allocation, while GTAP (Taheripour et al., 2011; Birur et al., 2008), FAPRI (FAPRI, 2011), EPPA (Paltsev et al.”
• The Indirect Land Use Impacts of United States Biofuel Policies: The Importance of Acreage, Yield, and Bilateral Trade Responses (2009, unknown): “For purposes of this paper, we choose the GTAP-BIO framework outlined in Birur, Hertel, and Tyner (2008).”