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Geography Matters: International Trade Patterns and the Indirect Land Use Effects of Biofuels

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  • Nelson B. Villoria
  • Thomas W. Hertel

Abstract

This article investigates the relationship between international trade patterns and the global distribution of coarse grain production responses to market developments in the United States. Our null hypothesis is that world markets are fully integrated, rendering the geographic persistence of bilateral trade flows irrelevant in the global production response to a change in U.S. prices. The alternative hypothesis allows price transmission to vary along with the intensity of competition among countries in specific markets. Using data from 1975 to 2002, we reject the null hypothesis. Our work has direct implications for the analysis of the global land use impacts of biofuel mandates. Copyright 2011, Oxford University Press.

Suggested Citation

  • Nelson B. Villoria & Thomas W. Hertel, 2011. "Geography Matters: International Trade Patterns and the Indirect Land Use Effects of Biofuels," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(4), pages 919-935.
    • Handle: RePEc:oup:ajagec:v:93:y:2011:i:4:p:919-935
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    File URL: http://hdl.handle.net/10.1093/ajae/aar025
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    Cited by:

    1. Anna Herzberger & Min Gon Chung & Kelly Kapsar & Kenneth A. Frank & Jianguo Liu, 2019. "Telecoupled Food Trade Affects Pericoupled Trade and Intracoupled Production," Sustainability, MDPI, vol. 11(10), pages 1-15, May.
    2. Beike Sumfleth & Stefan Majer & Daniela Thrän, 2020. "Recent Developments in Low iLUC Policies and Certification in the EU Biobased Economy," Sustainability, MDPI, vol. 12(19), pages 1-34, October.
    3. Forslund, Agneta & Gohin, Alexandre & Le Mouël, Chantal & Levert, Fabrice, 2014. "Biodiesel vs. ethanol, UE vs. US biofuels: So different in terms of LUC impact?," Working Papers 207810, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    4. Timilsina, Govinda R. & Mevel, Simon & Shrestha, Ashish, 2011. "Oil price, biofuels and food supply," Energy Policy, Elsevier, vol. 39(12), pages 8098-8105.
    5. 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.
    6. Hertel, By Thomas W. & Baldos, Uris L.C. & Fuglie, Keith O., 2020. "Trade in technology: A potential solution to the food security challenges of the 21st century," European Economic Review, Elsevier, vol. 127(C).
    7. Lota D. Tamini & Maurice Doyon & Rodrigue Simon, 2016. "Analyzing Trade Liberalization Effects in the Egg Sector Using a Dynamic Gravity Model," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(2), pages 383-411, June.
    8. Thomas Hertel & Jevgenijs Steinbuks & Uris Baldos, 2013. "Competition for land in the global bioeconomy," Agricultural Economics, International Association of Agricultural Economists, vol. 44(s1), pages 129-138, November.
    9. Garrett, R.D. & Grabs, J. & Cammelli, F. & Gollnow, F. & Levy, S.A., 2022. "Should payments for environmental services be used to implement zero-deforestation supply chain policies? The case of soy in the Brazilian Cerrado," World Development, Elsevier, vol. 152(C).
    10. Hertel, Thomas & Baldos, Uris Lantz & Fuglie, Keith O., 2019. "Trade in Technology: A Potential Solution to the Food Security Challenge of the 21st Century," Conference papers 333121, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. U. Martin Persson, 2015. "The impact of biofuel demand on agricultural commodity prices: a systematic review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 4(5), pages 410-428, September.
    12. Arto, Iñaki & Cazcarro, Ignacio & Garmendia, Eneko & Ruiz, Itxaso & Sanz, María J., 2022. "A new accounting framework for assessing forest footprint of nations," Ecological Economics, Elsevier, vol. 194(C).
    13. Nelson Villoria & Rachael Garrett & Florian Gollnow & Kimberly Carlson, 2022. "Leakage does not fully offset soy supply-chain efforts to reduce deforestation in Brazil," Nature Communications, Nature, vol. 13(1), pages 1-10, December.
    14. Hertel, Thomas, 2013. "Global Applied General Equilibrium Analysis Using the Global Trade Analysis Project Framework," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 815-876, Elsevier.
    15. Nelson B. Villoria & Derek Byerlee & James Stevenson, 2014. "The Effects of Agricultural Technological Progress on Deforestation: What Do We Really Know?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 36(2), pages 211-237.
    16. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy," Papers 306, World Trade Institute.
    17. Godar, Javier & Persson, U. Martin & Tizado, E. Jorge & Meyfroidt, Patrick, 2015. "Towards more accurate and policy relevant footprint analyses: Tracing fine-scale socio-environmental impacts of production to consumption," Ecological Economics, Elsevier, vol. 112(C), pages 25-35.
    18. Chen, Bowen & Villoria, Nelson B., 2018. "Food Price Variability and Import Dependence: A Country Panel Analysis," 2018 Annual Meeting, August 5-7, Washington, D.C. 274285, Agricultural and Applied Economics Association.
    19. le Polain de Waroux, Yann & Garrett, Rachael D. & Graesser, Jordan & Nolte, Christoph & White, Christopher & Lambin, Eric F., 2019. "The Restructuring of South American Soy and Beef Production and Trade Under Changing Environmental Regulations," World Development, Elsevier, vol. 121(C), pages 188-202.
    20. Janine Pelikan & Wolfgang Britz & Thomas W. Hertel, 2015. "Green Light for Green Agricultural Policies? An Analysis at Regional and Global Scales," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(1), pages 1-19, February.
    21. Vorotnikova, Ekaterina & Seale, James L, 2014. "The Effect of Energy Policy Act (EPA-2005) on Agricultural Land Allocation Dynamics in the United States," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162553, Southern Agricultural Economics Association.
    22. Gurgel, Angelo & Chen, Y.-H. Henry & Paltsev, Sergey & Reilly, John, 2016. "Linking Natural Resources to the CGE framework: the case of Land Use Changes in the EPPA Model," Conference papers 332705, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    23. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy: Extended Version," MPRA Paper 37816, University Library of Munich, Germany.
    24. Elina Bryngemark & Patrik Söderholm, 2022. "Green industrial policies and domestic production of biofuels: an econometric analysis of OECD countries," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(2), pages 225-261, April.
    25. Cui, Jingbo & Martin, Jeremy I., 2017. "Impacts of US biodiesel mandates on world vegetable oil markets," Energy Economics, Elsevier, vol. 65(C), pages 148-160.

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