IDEAS home Printed from https://ideas.repec.org/p/ecr/col022/3873.html
   My bibliography  Save this paper

The rise in global demand for ethanol and poverty in Brazil

Author

Listed:
  • Ferreira Filho, Joaquin Bento de Souza

Abstract

Brazil has traditionally been one of the most important sugarcane and ethanol producers in the world producing fuel ethanol on a large scale starting since 1975. In the 1990s, however, competition for resources from the sugar producers led to a rationing of ethanol and a decline in consumption. This lasted until 2003, when the scenario changed substantially. Technological developments in the auto industry and the increase in global oil prices granted new status to ethanol as an alternative to gasoline in Brazil. Consumers were now able to choose their fuel according to prices and forecasts point to ethanol demand to reach 73% of the national demand for liquid fuels by 2017. Ethanol exports are also expected to double by this date. While several studies have looked at the supply and demand scenarios for the ethanol and sugarcane expansion in Brazil, the social effects of this change require more attention. The technology used in sugarcane production differs significantly across Brazil's regions, as does the structure of land ownership. This suggests that the pattern of sugarcane expansion will have a large effect on income and wealth distribution. This study aims to identify the effects of the projected sugarcane and ethanol expansion in Brazil on labor demand, income distribution and poverty. Using a General Equilibrium framework an micro simulations, this paper evaluates the changes in labor demand in the agricultural sectors and in the economy as a whole. The study also analizes the effect of the changes in labor markets on income distribution and poverty. Model results show that the expansion in ethanol demand in Brazil would slightly reduce poverty but would increase the poverty gap. Income distribution improves very little due to more capital-intensive methods of production. This raises several points for policy considerations.

Suggested Citation

  • Ferreira Filho, Joaquin Bento de Souza, 2011. "The rise in global demand for ethanol and poverty in Brazil," Documentos de Proyectos 3873, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col022:3873
    Note: Incluye Bibliografía
    as

    Download full text from publisher

    File URL: http://repositorio.cepal.org/handle/11362/3873
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ferreira FIlho, Joaquim Bento de Souza & Horridge, Mark, 2005. "The Doha Round, Poverty and Regional Inequality in Brazil," Conference papers 331332, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. James A. Giesecke & J. Mark Horridge & Jose A. Scaramucci, 2007. "The Downside of Domestic Substitution of Oil with Biofuels: Will Brazil Catch the Dutch Disease?," Centre of Policy Studies/IMPACT Centre Working Papers g-169, Victoria University, Centre of Policy Studies/IMPACT Centre.
    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. Allexandro Mori Coelho & Maria Lúcia L. M. Pádua Lima & Samir Cury & Sergio Goldbaum, 2006. "Impacts Of The Proposals For Tariff Reductions In Nonagricultural Goods (Nama)," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 121, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    2. Carlos Azzoni & Jonathan Brooks & Joaquim Guilhoto & Scott McDonald, 2007. "Who in Brazil Will Gain from Global Trade Reforms?," The World Economy, Wiley Blackwell, vol. 30(10), pages 1568-1593, October.
    3. Boussard, Jean-Marc, 2006. "Consequences of price volatility in evaluating the benefits of liberalisation," MPRA Paper 4467, University Library of Munich, Germany.
    4. James A. Giesecke & John R. Madden, 2013. "Evidence-based regional economic policy analysis: the role of CGE modelling," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 6(2), pages 285-301.
    5. Joaquim Bento de Souza Ferreira Filho & Mark Horridge, 2006. "The Doha Development Agenda and Brazil: Distributional Impacts," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(3), pages 362-369.
    6. Hielke BUDDELMEYER & Nicolas HÉRAULT & Guyonne KALB & Mark VAN ZIJLL DE JONG, 2009. "Linking a Dynamic CGE Model and a Microsimulation Model: Climate Change Mitigation Policies and Income Distribution in Australia," EcoMod2009 21500020, EcoMod.
    7. van der Mensbrugghe, Dominique, 2006. "Global Merchandise Trade Reform: Comparing results with the LINKAGE Model," Conference papers 331525, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Giordano, Paolo & Li, Kun, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications (Working Papers) 4209, Inter-American Development Bank.
    9. Hertel, Thomas W. & Winters, L. Alan, 2005. "Poverty impacts of a WTO agreement : synthesis and overview," Policy Research Working Paper Series 3757, The World Bank.
    10. Ferreira-Filho, Joaquim Bento de Souza & Horridge, Mark, 2010. "Climate Change Impacts on Agriculture and Internal Migrations in Brazil," Conference papers 331926, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Ferreira Filho & Horridge, Mark & Joaquim Bento de Souza, 2009. "Would Trade Liberalization Help the Poor of Brazil?," Agricultural Distortions Working Paper Series 52795, World Bank.
    12. Sriniketh Nagavarapu, 2008. "Brazilian Ethanol: A Gift or Threat to the Environment and Regional Development?," Discussion Papers 07-039, Stanford Institute for Economic Policy Research.
    13. Jonasson, Erik & Filipski, Mateusz & Brooks, Jonathan & Taylor, J. Edward, 2014. "Modeling the welfare impacts of agricultural policies in developing countries," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 63-82.
    14. Modrego, Félix & Berdegué, Julio A., 2015. "A Large-Scale Mapping of Territorial Development Dynamics in Latin America," World Development, Elsevier, vol. 73(C), pages 11-31.
    15. Sievers, Luisa & Schaffer, Axel, 2016. "The impacts of the German biofuel quota on sectoral domestic production and imports of the German economy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 63(C), pages 497-505.
    16. Ferreira Filho, Joaquim Bento De Souza & Horridge, Mark, 2006. "The Doha Development Agenda And Brazil: A Closer Look Into The Distributional Impacts Inside Agriculture," 44th Congress, July 23-27, 2006, Fortaleza, Ceará, Brazil 149599, Sociedade Brasileira de Economia, Administracao e Sociologia Rural (SOBER).
    17. Ghaith, Ziad & Kulshreshtha, Suren & Natcher, David & Cameron, Bobby Thomas, 2021. "Regional Computable General Equilibrium models: A review," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 710-724.
    18. Maria Cipollina & Luca Salvatici, 2010. "Reciprocal Trade Agreements in Gravity Models: A Meta‐Analysis," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 63-80, February.
    19. 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.
    20. Thomas W. Hertel & Jeffrey J. Reimer, 2006. "Predicting the Poverty Impacts of Trade Reform," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, May.

    More about this item

    Statistics

    Access and download statistics

    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:ecr:col022:3873. 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: Biblioteca CEPAL (email available below). General contact details of provider: https://edirc.repec.org/data/eclaccl.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.