IDEAS home Printed from https://ideas.repec.org/p/ags/itic10/188083.html
   My bibliography  Save this paper

Towards a Genuine Sustainability Standard for Biofuel Production

Author

Listed:
  • Gorter, Harry
  • Tsur, Yacov

Abstract

Sustainability standards for biofuel production calculated via life cycle accounting (LCA) require a certain reduction in greenhouse gas (GHG) emissions relative to gasoline. Recently it has been shown that LCA gives biased results and should be extended to incorporate indirect land use change (iLUC). We show that even including iLUCs, LCA is still biased and distorted because it is based on GHG emission and uptake calculations, which assume economic values only if (i) the environmental price of carbon is constant over time and (ii) the social discount rate (SDR) equals zero. We offer a sustainability standard free of these restrictions, expressed in terms of a range of SDRs and a maximal GHG payback period. Applying our methodology to Brazilian and U.S. data, we find that in Brazil conversion to biofuel production of two land types is genuinely sustainable, i.e., satisfies our sustainability standard, whereas in the United States no land type satisfies our criterion. Furthermore, the social value of CO2e savings by having the ethanol production from 12.8 million hectares of U.S. corn be produced in Brazil instead may be as high as $817.7 bil.

Suggested Citation

  • Gorter, Harry & Tsur, Yacov, 2010. "Towards a Genuine Sustainability Standard for Biofuel Production," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 188083, International Consortium on Applied Bioeconomy Research (ICABR).
    • Handle: RePEc:ags:itic10:188083
    DOI: 10.22004/ag.econ.188083
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/188083/files/DeGroote679.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.188083?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ariga, Joshua & Jayne, Thom S. & Nyoro, James K., 2006. "Factors Driving the Growth in Fertilizer Consumption in Kenya, 1990-2005: Sustaining the Momentum in Kenya and Lessons for Broader Replicability in Sub-Saharan Africa," Working Papers 202619, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    2. Esther Duflo & Michael Kremer & Jonathan Robinson, 2008. "How High Are Rates of Return to Fertilizer? Evidence from Field Experiments in Kenya," American Economic Review, American Economic Association, vol. 98(2), pages 482-488, May.
    3. Duflo, Esther & Glennerster, Rachel & Kremer, Michael, 2008. "Using Randomization in Development Economics Research: A Toolkit," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 61, pages 3895-3962, Elsevier.
    4. Pingali, P. L. & Traxler, G., 2002. "Changing locus of agricultural research: will the poor benefit from biotechnology and privatization trends?," Food Policy, Elsevier, vol. 27(3), pages 223-238, June.
    5. Filmer, Deon & Pritchett, Lant, 1998. "Estimating wealth effects without expenditure data - or tears : with an application to educational enrollments in states of India," Policy Research Working Paper Series 1994, The World Bank.
    6. Tsur, Yacov & Zemel, Amos, 1998. "Pollution control in an uncertain environment," Journal of Economic Dynamics and Control, Elsevier, vol. 22(6), pages 967-975, June.
    7. Karp, Larry, 2005. "Global warming and hyperbolic discounting," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 261-282, February.
    8. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801, January.
    9. Minde, I., 2008. "Promoting fertilizer use in Africa: current issues and empirical evidence from Malawi, Zambia and Kenya," IWMI Working Papers H042064, International Water Management Institute.
    10. Freeman, H. Ade & Kaguongo, Wachira, 2003. "Fertilizer market liberalization and private retail trade in Kenya," Food Policy, Elsevier, vol. 28(5-6), pages 505-518.
    11. Ariga, Joshua & Jayne, Thomas S., 2009. "Private sector responses to public investments and policy reforms: The case of fertilizer and maize market development in Kenya," IFPRI discussion papers 921, International Food Policy Research Institute (IFPRI).
    12. Minde, Isaac J. & Jayne, Thomas S. & Crawford, Eric W. & Ariga, Joshua & Jones, Govereh, 2008. "Promoting Fertilizer Use in Africa: Current Issues and Empirical Evidence from Malawi, Zambia, and Kenya," Food Security International Development Policy Syntheses 54509, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    13. Kherallah, Mylène & Delgado, Christopher L. & Gabre-Madhin, Eleni Z. & Minot, Nicholas & Johnson, Michael, 2002. "Reforming agricultural markets in Africa," Food policy statements 38, International Food Policy Research Institute (IFPRI).
    14. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers Archive 12881, Iowa State University, Department of Economics.
    15. Ricker-Gilbert, Jacob & Jayne, Thomas S., 2009. "Do Fertilizer Subsidies Affect the Demand for Commercial Fertilizer? An Example from Malawi," 2009 Conference, August 16-22, 2009, Beijing, China 51606, International Association of Agricultural Economists.
    16. Partha Dasgupta & Eric Maskin, 2005. "Uncertainty and Hyperbolic Discounting," American Economic Review, American Economic Association, vol. 95(4), pages 1290-1299, September.
    17. Weitzman, Martin L., 1998. "Why the Far-Distant Future Should Be Discounted at Its Lowest Possible Rate," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 201-208, November.
    18. William R. Cline, 1992. "Economics of Global Warming, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 39, April.
    19. Graciela Chichilnisky, 1996. "An axiomatic approach to sustainable development," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(2), pages 231-257, April.
    20. Graciela Chichilnisky, 1997. "What Is Sustainable Development?," Land Economics, University of Wisconsin Press, vol. 73(4), pages 467-491.
    21. Tsur, Yacov & Zemel, Amos, 1996. "Accounting for global warming risks: Resource management under event uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1289-1305.
    22. Omamo, Steven Were & Mose, Lawrence O., 2001. "Fertilizer trade under market liberalization: preliminary evidence from Kenya," Food Policy, Elsevier, vol. 26(1), pages 1-10, February.
    23. Byerlee, Derek, 1998. "The search for a new paradigm for the development of national agricultural research systems," World Development, Elsevier, vol. 26(6), pages 1049-1055, June.
    24. Martin L. Weitzman, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 703-724, September.
    25. Spielman, David J., 2007. "Pro-poor agricultural biotechnology: Can the international research system deliver the goods?," Food Policy, Elsevier, vol. 32(2), pages 189-204, April.
    26. Byerlee, Derek & Fischer, Ken, 2002. "Accessing Modern Science: Policy and Institutional Options for Agricultural Biotechnology in Developing Countries," World Development, Elsevier, vol. 30(6), pages 931-948, June.
    27. Kherallah, Mylene & Delgado, Christopher L. & Gabre-Madhin, Eleni Z. & Minot, Nicholas & Johnson, Mi (ed.), 2002. "Reforming agricultural markets in Africa: Achievements and challenges," IFPRI books, International Food Policy Research Institute (IFPRI), number 0-8018-7145-X, October.
    28. Pardey, Philip G. & Beintema, Nienke M. & Dehmer, Steven & Wood, Stanley, 2006. "Agricultural research: a growing global divide?," Food policy reports 17, International Food Policy Research Institute (IFPRI).
    29. Skoufias, Emmanuel & Davis, Benjamin & de la Vega, Sergio, 2001. "Targeting the Poor in Mexico: An Evaluation of the Selection of Households into PROGRESA," World Development, Elsevier, vol. 29(10), pages 1769-1784, October.
    30. Minot, Nicholas & Benson, Todd, 2009. "Fertilizer subsidies in Africa: Are vouchers the answer?," Issue briefs 60, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. De Groote, Hugo & Andam, Kwaw S. & Munyua, Bernard & Spielman, David J., 2010. "Market Segmentation Strategies And Seed Purchasing Decisions Among Smallholders: Preliminary Findings From Kenya," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 188084, International Consortium on Applied Bioeconomy Research (ICABR).
    2. Birol, Ekin & Koundouri, Phoebe & Kountouris, Yiannis, 2010. "Assessing the economic viability of alternative water resources in water-scarce regions: Combining economic valuation, cost-benefit analysis and discounting," Ecological Economics, Elsevier, vol. 69(4), pages 839-847, February.
    3. repec:hal:pseose:insu-01105358 is not listed on IDEAS
    4. Karp, Larry S. & Tsur, Yacov, 2007. "Climate Policy When the Distant Future Matters: Catastrophic Events with Hyperbolic Discounting," CUDARE Working Papers 7186, University of California, Berkeley, Department of Agricultural and Resource Economics.
    5. Karp, Larry & Tsur, Yacov, 2007. "Discounting and Climate Change Policy," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5sm6j36x, Department of Agricultural & Resource Economics, UC Berkeley.
    6. Mouez Fodha, 2015. "Nuclear waste storage and environmental intergenerational externalities," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 18(1/2), pages 94-114.
    7. Tol, Richard S.J., 2013. "Targets for global climate policy: An overview," Journal of Economic Dynamics and Control, Elsevier, vol. 37(5), pages 911-928.
    8. Karp, Larry & Tsur, Yacov, 2011. "Time perspective and climate change policy," Journal of Environmental Economics and Management, Elsevier, vol. 62(1), pages 1-14, July.
    9. Karp, Larry S. & Tsur, Yacov, 2007. "Discounting And Climate Change Policy," Discussion Papers 7149, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    10. Sheahan, Megan & Black, Roy & Jayne, Thomas S., 2012. "What is the Scope for Increased Fertilizer Use in Kenya?," Food Security International Development Working Papers 135283, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    11. Anwar Naseem & David J. Spielman & Steven Were Omamo, 2010. "Private-sector investment in R&D: a review of policy options to promote its growth in developing-country agriculture," Agribusiness, John Wiley & Sons, Ltd., vol. 26(1), pages 143-173.
    12. Juana AZNAR-MARQUEZ & Jose-Ramon RUIZ-TAMARIT, 2012. "Sufficient and Necessary Conditions for Non-Catastrophic Growth," LIDAM Discussion Papers IRES 2012027, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    13. Simon Dietz & David Maddison, 2009. "New Frontiers in the Economics of Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(3), pages 295-306, July.
    14. Bommier, Antoine & Lanz, Bruno & Zuber, Stéphane, 2015. "Models-as-usual for unusual risks? On the value of catastrophic climate change," Journal of Environmental Economics and Management, Elsevier, vol. 74(C), pages 1-22.
    15. Sheahan, Megan & Black, Roy & Jayne, T.S., 2013. "Are Kenyan farmers under-utilizing fertilizer? Implications for input intensification strategies and research," Food Policy, Elsevier, vol. 41(C), pages 39-52.
    16. Sheahan, Megan & Black, Roy & Jayne, Thomas S., 2012. "Are Farmers Under-Utilizing Fertilizer? Evidence from Kenya," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126739, International Association of Agricultural Economists.
    17. Ross Guest, 2011. "Social time preference and the optimal carbon price," Applied Economics Letters, Taylor & Francis Journals, vol. 18(12), pages 1163-1166.
    18. Aline Chiabai & Ibon Galarraga & Anil Markandya & Unai Pascual, 2013. "The Equivalency Principle for Discounting the Value of Natural Assets: An Application to an Investment Project in the Basque Coast," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(4), pages 535-550, December.
    19. Christian Traeger, 2014. "Why uncertainty matters: discounting under intertemporal risk aversion and ambiguity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(3), pages 627-664, August.
    20. Eric Fesselmeyer & Haoming Liu & Alberto Salvo, 2022. "Declining discount rates in Singapore's market for privately developed apartments," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(2), pages 330-350, March.
    21. Dongmei Guo & Shouyang Wang & Lin Zhao, 2020. "More Stringent Cap or Higher Penalty Fee? Dealing with Procrastination in Environmental Protection," Annals of Economics and Finance, Society for AEF, vol. 21(1), pages 41-69, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:itic10:188083. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/icabrea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.