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Modelling the costs of energy crops: A case study of US corn and Brazilian sugar cane

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  • Méjean, Aurélie
  • Hope, Chris

Abstract

High crude oil prices, uncertainties about the consequences of climate change and the eventual decline of conventional oil production raise the prospects of alternative fuels, such as biofuels. This paper describes a simple probabilistic model of the costs of energy crops, drawing on the user's degree of belief about a series of parameters as an input. This forward-looking analysis quantifies the effects of production constraints and experience on the costs of corn and sugar cane, which can then be converted to bioethanol. Land is a limited and heterogeneous resource: the crop cost model builds on the marginal land suitability, which is assumed to decrease as more land is taken into production, driving down the marginal crop yield. Also, the maximum achievable yield is increased over time by technological change, while the yield gap between the actual yield and the maximum yield decreases through improved management practices. The results show large uncertainties in the future costs of producing corn and sugar cane, with a 90% confidence interval of 2.9-7.2$/GJ in 2030 for marginal corn costs, and 1.5-2.5$/GJ in 2030 for marginal sugar cane costs. The influence of each parameter on these supply costs is examined.

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  • Méjean, Aurélie & Hope, Chris, 2010. "Modelling the costs of energy crops: A case study of US corn and Brazilian sugar cane," Energy Policy, Elsevier, vol. 38(1), pages 547-561, January.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:1:p:547-561
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    1. Raele, Ricardo & Boaventura, João Mauricio Gama & Fischmann, Adalberto Américo & Sarturi, Greici, 2014. "Scenarios for the second generation ethanol in Brazil," Technological Forecasting and Social Change, Elsevier, vol. 87(C), pages 205-223.
    2. Bazilian, Morgan & Rogner, Holger & Howells, Mark & Hermann, Sebastian & Arent, Douglas & Gielen, Dolf & Steduto, Pasquale & Mueller, Alexander & Komor, Paul & Tol, Richard S.J. & Yumkella, Kandeh K., 2011. "Considering the energy, water and food nexus: Towards an integrated modelling approach," Energy Policy, Elsevier, vol. 39(12), pages 7896-7906.
    3. Pishgar-Komleh, Seyyed Hassan & Keyhani, Alireza & Mostofi-Sarkari, Mohammad Reza & Jafari, Ali, 2012. "Energy and economic analysis of different seed corn harvesting systems in Iran," Energy, Elsevier, vol. 43(1), pages 469-476.

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    More about this item

    Keywords

    Biofuels Experience curve Land suitability;

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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