Biofuels for all? Understanding the Global Impacts of Multinational Mandates

By Thomas W. Hertel, W. Tyner, Dileep K. Birur. GTAP Working Paper, 2008

121 citations recorded by the source corpus.

The recent rise in world oil prices, coupled with heightened interest in the abatement of greenhouse gas emissions, has led to a sharp increase in domestic biofuels production around the world. Previous authors have devoted considerable attention to the impacts of these policies on a country-by-country basis. However, there are also strong interactions among these programs, as they compete in world markets for feedstocks and ultimately for a limited supply of global land. In this paper, we evaluate the interplay between two of the largest biofuels programs, namely the renewable fuel mandates in the US and the EU. We examine how the presence of each of these programs influences the other, and also how their combined impact influences global markets and land use around the world. We begin with an analysis of the origins of the recent bio-fuel boom, using the historical period from 2001-2006 for purposes of model validation. This was a period of rapidly rising oil prices, increased subsidies in the EU, and, in the US, there was a ban on the major competitor to ethanol for gasoline additives. Our analysis of this historical period permits us to evaluate the relative contribution of each of these factors to the global biofuel boom. We also use this historical simulation to establish a 2006 benchmark biofuel economy from which we conduct our analysis of future mandates. Our prospective analysis of the impacts of the biofuels boom on commodity markets focuses on the 2006-2015 time period, during which existing investments and new mandates in the US and EU are expected to substantially increase the share of agricultural products (e.g., corn in the US, oilseeds in the EU, and sugar in Brazil) utilized by the biofuels sector. In the US, this share could more than double from 2006 levels, while the share of oilseeds going to biodiesel in the EU could triple.

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Citations in the corpus

Global trade and environmental impact study of the EU biofuels mandate. (2010, methodology): “…model (Burniaux and Truong, of biofuels production on the global agricultural market; Hertel, Tyner, and Birur (2008) looking at the impact of both US and EU biofuel support policies; and Taheripour et al. (2008) which compares the impact of adding by-products to the results of Hertel et al (2008).”
Integrating Bioenergy into Computable General Equilibrium Models – A Survey (2010, methodology): “Extending the GTAP model with biofuels to incorporate CO 2 and other GHG emissions including those associate with land use changes is seen as a logical next step (Hertel et al., 2008, Birur et al., 2008).”
Biofuels and their By-Products: Global Economic and Environmental Implications (2010, background): “Following [11] we allow cropland to come from either pasture or currently accessible forestlands.”
Fighting global food price rises in the developing world: the response of China and its effect on domestic and world markets (2008, methodology): “One way to do it is explored in Hertel et al. (2008) who use different agroecological zones (AEZs).”
Impacts of the EU biofuel target on agricultural markets and land use: a comparative modelling assessment (2010, methodology): “…the simulations: • scenarios: studies by EC DG AGRI (2007), Banse and Grethe (2008), and Britz and Leip (2008) involve changes to EU policy only; studies by Hertel et al. (2008) and Taheripour et al. (2008) simulate simultaneous changes in EU and US policy; OECD (2008) and Rosegrant (2008)…”