Influence of water allocation on bioenergy production under climate change: A stochastic mathematical programming approach

As climate change is likely to alter regional water availability via shifted precipitation patterns that affect agricultural practices, the analysis of the effectiveness of bioenergy promotion policies and efficiency of bioenergy development requires a thorough consideration of the interrelationships among water, agriculture, and renewable energy development in the context of climate change. We propose a stochastic, price-endogenous mathematical programming with recourse model by linking a well-established water resource model to a bioenergy production framework to investigate the aggregate economic and environmental effect of bioenergy production. This study theoretically analyzes the optimal resource allocation and production conditions of the model, and empirically tests the goodness of the proposed model with observed data. The results show that the proposed framework is likely to reflect the actual bioenergy production in the face of climate-induced impacts, and at small to moderate climate impacts the bioenergy production is likely to be more influenced by the energy and emission prices than by climate-induced yield changes. In addition, while the reduction in precipitation would not result in significant effects on bioenergy production, a substantial change in land use and cropping decisions might occur.