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From a rise in B to a fall in C? SVAR analysis of environmental impact of biofuels

Author

Listed:
  • Pavel Ciaian
  • d'Artis Kancs
  • Giuseppe Pirolix
  • Miroslava Rajcaniova

Abstract

This is the rst paper that econometrically estimates the impact of rising Bioenergy production on global CO2 emissions. We apply a structural vector autoregression (SVAR) approach to time series from 1961 to 2009 with annual observation for the world biofuel production and global CO2 emissions. We nd that in the medium- to long-run biofuels signicantly reduce global CO2 emissions: the CO2 emission elasticities with respect to biofuels range between -0.57 and -0.80. In the short-run, however, biofuels may increase CO2 emissions temporarily. Our ndings complement those of life-cycle assessment and simulation models. However, by employing a more holistic approach and obtaining more robust estimates of environmental impact of biofuels, our results are particularly valuable for policy makers.

Suggested Citation

  • Pavel Ciaian & d'Artis Kancs & Giuseppe Pirolix & Miroslava Rajcaniova, 2015. "From a rise in B to a fall in C? SVAR analysis of environmental impact of biofuels," Working Papers of LICOS - Centre for Institutions and Economic Performance 516223, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
    • Handle: RePEc:ete:licosp:516223
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    3. Ondřej Filip & Karel Janda & Ladislav Krištoufek, 2018. "Ceny biopaliv a souvisejících komodit: analýza s použitím metod minimální kostry grafu a hierarchických stromů [Prices of Biofuels and Related Commodities: an Analysis Using Methods of Minimum Span," Politická ekonomie, Prague University of Economics and Business, vol. 2018(2), pages 218-239.
    4. Gohin, Alexandre, 2016. "Understanding the revised CARB estimates of the land use changes and greenhouse gas emissions induced by biofuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 402-412.
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    7. Zeng, Shihong & Nan, Xin & Liu, Chao & Chen, Jiuying, 2017. "The response of the Beijing carbon emissions allowance price (BJC) to macroeconomic and energy price indices," Energy Policy, Elsevier, vol. 106(C), pages 111-121.

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    More about this item

    Keywords

    SVAR; time-series econometrics; biofuels; CO2 emissions; environment;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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