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Food Production Vs. Biomass Export Vs. Land-Use Change: A Cge Analysis For Argentina

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  • Perry, Miles

Abstract

World trade in biomass is likely to increase in the years up to 2020 as imports are required to meet the demand created (directly or indirectly) by policy measures such as the EU Biofuels Directive. This paper assesses the macroeconomic consequences such large-scale trade for the exporting country, using a computable general equilibrium (CGE) model of Argentina. Given an exogenous increase in world prices for biomass, the model finds that production shifts towards biomass and away from other sectors. Implications of this include changes in the relative prices of goods and the purchasing power of labour. Price rises are largest in land-intensive sectors of the economy and the overall purchasing power of labour is adversely affected since biomass sectors are among the least labour intensive. When expansion of the agricultural area is permitted, relative price changes become less pronounced. However, expansion of the agricultural frontier may have adverse environmental impacts, including lowering the net GHG savings attributable to the biomass produced.

Suggested Citation

  • Perry, Miles, 2008. "Food Production Vs. Biomass Export Vs. Land-Use Change: A Cge Analysis For Argentina," MPRA Paper 13442, University Library of Munich, Germany, revised 16 Feb 2009.
    • Handle: RePEc:pra:mprapa:13442
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    File URL: https://mpra.ub.uni-muenchen.de/13442/1/MPRA_paper_13442.pdf
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    References listed on IDEAS

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    2. Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Springer;Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
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    4. von Braun, Joachim, 2007. "The world food situation: New driving forces and required actions," Food policy reports 18, International Food Policy Research Institute (IFPRI).
    5. Bohringer, Christoph & Rutherford, Thomas F., 2008. "Combining bottom-up and top-down," Energy Economics, Elsevier, vol. 30(2), pages 574-596, March.
    6. 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.
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    More about this item

    Keywords

    CGE; Biofuels; Argentina;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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