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Ethanol Production, Food and Forests

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  • Saraly Andrade de Sá
  • Charles Palmer
  • Stefanie Engel

Abstract

This paper investigates the direct and indirect impacts of ethanol production on land use, deforestation and food production. A partial equilibrium model of a national economy with two sectors and two regions, one of which includes a residual forest, is developed. It analyses how an exogenous increase in the ethanol price affcts input allocation (land and labor) between sectors (energy crop and food). Three potential effects are identified. First, the standard and well-documented effect of direct land competition between rival uses increases deforestation and decreases food production. Second, an indirect displacement of food production across regions, provoked by a shift in the price of food, increases deforestation and reduces the total output of the food sector. Finally, labor mobility between sectors and regions tends to decrease food production but also deforestation. The overall impact of ethanol production on forest conversion is ambiguous, providing a number of interesting pointers to further, empirical research.
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Suggested Citation

  • Saraly Andrade de Sá & Charles Palmer & Stefanie Engel, 2012. "Ethanol Production, Food and Forests," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(1), pages 1-21, January.
    • Handle: RePEc:kap:enreec:v:51:y:2012:i:1:p:1-21
    DOI: 10.1007/s10640-011-9516-4
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    Cited by:

    1. Bahel, Eric & Marrouch, Walid & Gaudet, Gérard, 2013. "The economics of oil, biofuel and food commodities," Resource and Energy Economics, Elsevier, vol. 35(4), pages 599-617.
    2. James Thurlow & Giacomo Branca & Erika Felix & Irini Maltsoglou & Luis E. Rincón, 2016. "Producing Biofuels in Low-Income Countries: An Integrated Environmental and Economic Assessment for Tanzania," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(2), pages 153-171, June.
    3. Donatella Danzi & Ivana Marino & Isabella De Bari & Silvio Mastrolitti & Giacomo L. Petretto & Domenico Pignone & Michela Janni & Francesco Cellini & Tullio Venditti, 2021. "Assessment of Durum Wheat ( Triticum durum Desf.) Genotypes Diversity for the Integrated Production of Bioethanol and Grains," Energies, MDPI, vol. 14(22), pages 1-14, November.
    4. Matthias Diermeier & Torsten Schmidt, 2012. "Oil Price Effects on Land Use Competition – An Empirical Analysis," Ruhr Economic Papers 0340, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. repec:zbw:rwirep:0340 is not listed on IDEAS
    6. Andrade de Sá, Saraly & Palmer, Charles & di Falco, Salvatore, 2013. "Dynamics of indirect land-use change: Empirical evidence from Brazil," Journal of Environmental Economics and Management, Elsevier, vol. 65(3), pages 377-393.
    7. James Thurlow & Giacomo Branca & Erika Felix & Irini Maltsoglou & Luis E. Rincón, 2016. "Producing Biofuels in Low-Income Countries: An Integrated Environmental and Economic Assessment for Tanzania," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(2), pages 153-171, June.
    8. Diermeier, Matthias & Schmidt, Torsten, 2014. "Oil price effects on land use competition: an empirical analysis," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(1), pages 1-17.

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    More about this item

    Keywords

    Deforestation; Ethanol; Food; Indirect impacts; Land use; Migration; Q11; Q24; Q42;
    All these keywords.

    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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