IDEAS home Printed from https://ideas.repec.org/p/hae/wpaper/2013-10.html
   My bibliography  Save this paper

Market, Welfare and Land-Use Implications of Lignocellulosic Bioethanol in Hawai�i

Author

Listed:
  • Junko Mochizuki

    (International Institute of Applied Systems Analysis (IIASA))

  • John F. Yanagida

    (University of Hawaii at Manoa, Department of Natural Resources and Environmental)

  • Makena Coffman

    (University of Hawaii at Manoa, Department of Urban and Regional Planning University of Hawaii Economic Research Organization)

Abstract

This article examines land-use, market and welfare implications of lignocellulosic bioethanol production in Hawai?i to satisfy 10% and 20% of the State�s gasoline demand in line with the State�s ethanol blending mandate and Alternative Fuels Standard (AFS). A static computable general equilibrium (CGE) model is used to evaluate four alternative support mechanisms for bioethanol. Namely: i) a federal blending tax credit, ii) a long-term purchase contract, iii) a state production subsidy financed by a lump-sum tax and iv) a state production subsidy financed by an ad valorem gasoline tax. We find that because Hawaii-produced bioethanol is relatively costly, all scenarios are welfare reducing for Hawaii residents: estimated between -0.14% and -0.32%. Unsurprisingly, Hawaii�s economy and its residents fair best under the federal blending tax credit scenario, with a positive impact to gross state product of $49 million. Otherwise, impacts to gross state product are negative (up to -$63 million). We additionally find that Hawaii-based bioethanol is not likely to offer substantial greenhouse gas emissions savings in comparison to imported biofuel, and as such the policy cost per tonne of emissions displaced ranges between $130 to $2,100/tonne of CO2e. The policies serve to increase the value of agricultural lands, where we estimate that the value of pasture land could increase as much as 150% in the 20% AFS scenario.

Suggested Citation

  • Junko Mochizuki & John F. Yanagida & Makena Coffman, 2013. "Market, Welfare and Land-Use Implications of Lignocellulosic Bioethanol in Hawai�i," Working Papers 2013-10, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
  • Handle: RePEc:hae:wpaper:2013-10
    as

    Download full text from publisher

    File URL: https://uhero.hawaii.edu/wp-content/uploads/2020/03/WP_2013-10.pdf
    File Function: First version, 2013
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Reilly, John M. & Gurgel, Angelo Costa & Paltsev, Sergey, 2008. "Biofuels and Land Use Change," Environmental and Rural Development Impacts Conference, October 15-16, 2008, St. Louis, Missouri 53490, Farm Foundation, Transition to a Bio Economy Conferences.
    2. Xavier Gitiaux & Sebastian Rausch & Sergey Paltsev & John M. Reilly, 2012. "Biofuels, Climate Policy, and the European Vehicle Fleet," Journal of Transport Economics and Policy, University of Bath, vol. 46(1), pages 1-23, January.
    3. Govinda R. Timilsina & John C. Beghin & Dominique van der Mensbrugghe & Simon Mevel, 2012. "The impacts of biofuels targets on land‐use change and food supply: A global CGE assessment," Agricultural Economics, International Association of Agricultural Economists, vol. 43(3), pages 315-332, May.
    4. Gurgel Angelo & Reilly John M & Paltsev Sergey, 2007. "Potential Land Use Implications of a Global Biofuels Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-36, December.
    5. Hertel, Thomas W. & Tyner, Wallace E. & Birur, Dileep K., 2008. "Biofuels for all? Understanding the Global Impacts of Multinational Mandates," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6526, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Kretschmer, Bettina & Narita, Daiju & Peterson, Sonja, 2009. "The economic effects of the EU biofuel target," Open Access Publications from Kiel Institute for the World Economy 32984, Kiel Institute for the World Economy (IfW Kiel).
    7. Turnquist, Alan & Fortenbery, T. Randall & Foltz, Jeremy D., 2008. "Progress or Devastation? The Effects of Ethanol Plant Location on Local Land Use," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6125, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Makena Coffman, 2010. "Oil price shocks in an island economy: an analysis of the oil price-macroeconomy relationship," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(3), pages 599-620, June.
    9. Bouët, Antoine & Dimaranan, Betina V. & Valin, Hugo, 2010. "Modeling the global trade and environmental impacts of biofuel policies," IFPRI discussion papers 1018, International Food Policy Research Institute (IFPRI).
    10. Taheripour, Farzad & Tyner, Wallace E., 2012. "Welfare Impacts of Renewable Fuel Standard: Economic Efficiency vs. Rebound Effect," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124737, Agricultural and Applied Economics Association.
    11. Arndt, Channing & Pauw, Karl & Thurlow, James, 2012. "Biofuels and economic development: A computable general equilibrium analysis for Tanzania," Energy Economics, Elsevier, vol. 34(6), pages 1922-1930.
    12. Govinda Timilsina & Simon Mevel, 2013. "Biofuels and Climate Change Mitigation: A CGE Analysis Incorporating Land-Use Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(1), pages 1-19, May.
    13. McCullough, Michael & Holland, David W. & Painter, Kathleen M. & Stodick, Leroy & Yoder, Jonathan K., 2011. "Economic and Environmental Impacts of Washington State Biofuel Policy Alternatives," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(3), pages 1-15.
    14. Jayson Beckman & Carol Adaire Jones & Ronald Sands, 2011. "A Global General Equilibrium Analysis of Biofuel Mandates and Greenhouse Gas Emissions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(2), pages 334-341.
    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. Mochizuki, Junko & Coffman, Makena & Yanagida, John F., 2015. "Market, welfare and land-use implications of lignocellulosic bioethanol in Hawai'i," Renewable Energy, Elsevier, vol. 76(C), pages 102-114.
    2. Qu, Yang & Swales, J. Kim & Hooper, Tara & Austen, Melanie C. & Wang, Xinhao & Papathanasopoulou, Eleni & Huang, Junling & Yan, Xiaoyu, 2023. "Economic trade-offs in marine resource use between offshore wind farms and fisheries in Scottish waters," Energy Economics, Elsevier, vol. 125(C).
    3. Grant J. Allan, 2015. "The Regional Economic Impacts of Biofuels: A Review of Multisectoral Modelling Techniques and Evaluation of Applications," Regional Studies, Taylor & Francis Journals, vol. 49(4), pages 615-643, April.
    4. Vitezslav Pisa & Jan Bruha & Vitezslav Pisa, 2011. "Dynamics of the Commodity Prices and Quantities: An Analysis using a Dynamic Multiregional CGE Model," EcoMod2011 2889, EcoMod.
    5. Cai, Yongxia & Beach, Robert H. & Zhang, Yuquan, 2014. "Exploring the Implications of Oil Prices for Global Biofuels, Food Security, and GHG Mitigation," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170589, Agricultural and Applied Economics Association.
    6. Sukati, Mphumuzi, 2014. "The South African Bio ethanol blend mandate and its implications on regional agricultural markets and welfare," MPRA Paper 57702, University Library of Munich, Germany.
    7. Elizondo, Alejandra & Boyd, Roy, 2017. "Economic impact of ethanol promotion in Mexico: A general equilibrium analysis," Energy Policy, Elsevier, vol. 101(C), pages 293-301.
    8. Doumax-Tagliavini, Virginie & Sarasa, Cristina, 2018. "Looking towards policies supporting biofuels and technological change: Evidence from France," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 430-439.
    9. Ben Fradj, Nosra & Aghajanzadeh-Darzi, Parisa & Jayet, Pierre-Alain, 2012. "Perennial crops in European farming systems and land use change: a model assessment," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126781, International Association of Agricultural Economists.
    10. 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.
    11. Ehsanreza Sajedinia & Wallace E. Tyner, 2021. "Use of General Equilibrium Models in Evaluating Biofuels Policies," World Scientific Book Chapters, in: Peter Dixon & Joseph Francois & Dominique van der Mensbrugghe (ed.), POLICY ANALYSIS AND MODELING OF THE GLOBAL ECONOMY A Festschrift Celebrating Thomas Hertel, chapter 14, pages 437-465, World Scientific Publishing Co. Pte. Ltd..
    12. Mirzabaev, Alisher & Guta, Dawit & Goedecke, Jann & Gaur, Varun & Börner, Jan & Virchow, Detlef & Denich, Manfred & von Braun, Joachim, 2014. "Bioenergy, Food Security and Poverty Reduction: Mitigating tradeoffs and promoting synergies along the Water- Energy-Food Security Nexus," Working Papers 180421, University of Bonn, Center for Development Research (ZEF).
    13. Hoefnagels, Ric & Banse, Martin & Dornburg, Veronika & Faaij, André, 2013. "Macro-economic impact of large-scale deployment of biomass resources for energy and materials on a national level—A combined approach for the Netherlands," Energy Policy, Elsevier, vol. 59(C), pages 727-744.
    14. Weng, Yuwei & Chang, Shiyan & Cai, Wenjia & Wang, Can, 2019. "Exploring the impacts of biofuel expansion on land use change and food security based on a land explicit CGE model: A case study of China," Applied Energy, Elsevier, vol. 236(C), pages 514-525.
    15. 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.
    16. Argueyrolles, Robin & Delzeit, Ruth, 2022. "The interconnections between Fossil Fuel Subsidy Reforms and biofuels," Conference papers 333492, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    17. Ronald D. Sands, Katja Schumacher, and Hannah Forster, 2014. "U.S. CO2 Mitigation in a Global Context: Welfare, Trade and Land Use," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    18. François Joseph Cabral & Fatou Cissé & Abdoulaye Diagne & Msangi Siwa, 2017. "Global Biofuel Production and Poverty in Senegal," Economics Bulletin, AccessEcon, vol. 37(3), pages 1435-1449.
    19. María Blanco & Marcel Adenäuer & Shailesh Shrestha & Arno Becker, 2012. "Methodology to assess EU Biofuel Policies: The CAPRI Approach," JRC Research Reports JRC80037, Joint Research Centre.
    20. Hugo Valin & Betina Dimaranan & Antoine Bouet, 2009. "Biofuels in the world markets: A Computable General Equilibrium assessment of environmental costs related to land use changes," Working Papers hal-03550775, HAL.

    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:hae:wpaper:2013-10. 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: UHERO (email available below). General contact details of provider: https://edirc.repec.org/data/heuhius.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.