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Evaluating the Environmental Cost of Biofuels Policy: an Illustration with Bioethanol

Author

Listed:
  • Hugo Valin
  • Betina Dimaranan
  • Antoine Bouët

Abstract

In this article we develop an innovative methodology for assessing indirect land use change effects related to biofuels policies in a Computable General equilibrium framework. We apply this methodology in looking at the impacts of ethanol policies in the United States and in the European Union under different trade policy options. Our results show that ethanol production has environmental benefits only under certain restrictive assumptions: in four from our five sets of parameters tests, the payback time for ethanol production was found to be at least 10 years in 2020. The results should be interpreted with some caution as there are many assumptions involved in such an assessment.

Suggested Citation

  • Hugo Valin & Betina Dimaranan & Antoine Bouët, 2010. "Evaluating the Environmental Cost of Biofuels Policy: an Illustration with Bioethanol," International Economics, CEPII research center, issue 122, pages 89-120.
    • Handle: RePEc:cii:cepiie:2010-q2-122-4
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    File URL: http://www.sciencedirect.com/science/article/pii/S2110701713600311
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    Citations

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    Cited by:

    1. Gohin, Alexandre & Levert, Fabrice & Forslund, Agneta, 2017. "The EU Argentinean Trade Dispute on Biodiesel: An Economic Assessment," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 66(1), March.
    2. David Laborde & Carmen Estrades & Antoine Bouët, 2013. "A Global Assessment of the Economic Effects of Export Taxes," The World Economy, Wiley Blackwell, vol. 36(10), pages 1333-1354, October.
    3. Bouët, Antoine & Laborde Debucquet, David, 2017. "Introduction: Setting the stage," IFPRI book chapters, in: Bouët, Antoine & Laborde Debucquet, David (ed.), Agriculture, development, and the global trading system: 2000– 2015, chapter 1, International Food Policy Research Institute (IFPRI).

    More about this item

    Keywords

    Biofuels; indirect land use change; carbon balance;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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