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Biofuels, Policy Options, and Their Implications: Analyses Using Partial and General Equilibrium Approaches

Author

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  • Tyner Wallace

    (Purdue University)

  • Taheripour Farzad

    (Purdue University)

Abstract
The biofuel industry has been experiencing a period of extraordinary growth, fueled by a combination of high oil prices, ambitious renewable fuel standards, subsidies, and import protection. This rapid growth has important consequences for the US and global economies. In this paper, we examine these consequences from partial and general equilibrium perspectives. We first examine US biofuel policy backgrounds to determine factors which caused the boom in the ethanol industry in recent years. Then we use a partial equilibrium model to investigate the economic consequences of further expansion in the ethanol industry for the key economic variables of the US agricultural and energy markets under alternative policy options which might be used to promote ethanol production in the future. Finally, we extend our analyses to examine consequences of further biofuel production at a global scale. One of the important conclusions of the research regards the importance of the link between energy and agricultural markets that has now come into being. That linkage has profound implications for the agricultural sector globally.

Suggested Citation

  • Tyner Wallace & Taheripour Farzad, 2008. "Biofuels, Policy Options, and Their Implications: Analyses Using Partial and General Equilibrium Approaches," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(2), pages 1-19, December.
    • Handle: RePEc:bpj:bjafio:v:6:y:2008:i:2:n:9
    DOI: 10.2202/1542-0485.1234
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    References listed on IDEAS

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    1. 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).
    2. 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).
    3. Wallace E. Tyner & Farzad Taheripour, 2008. "Policy Options for Integrated Energy and Agricultural Markets," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(3), pages 387-396.
    4. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    5. Burniaux, Jean-March & Truong, Truong P., 2002. "Gtap-E: An Energy-Environmental Version Of The Gtap Model," Technical Papers 28705, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Tiffany, Douglas G. & Eidman, Vernon R., 2003. "Factors Associated With Success Of Fuel Ethanol Producers," Staff Papers 14155, University of Minnesota, Department of Applied Economics.
    7. Birur, Dileep & Hertel, Thomas & Tyner, Wally, 2008. "Impact of Biofuel Production on World Agricultural Markets: A Computable General Equilibrium Analysis," GTAP Working Papers 2413, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    8. Tyner, Wallace E. & Taheripour, Farzad, 2008. "Policy analysis for integrated energy and agricultural markets in a partial equilibrium framework," Integration of Agricultural and Energy Systems Conference, February 12-13, 2008, Atlanta, Georgia 48712, Farm Foundation.
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    Cited by:

    1. Tyner, Wallace E. & Taheripour, Farzad & Perkis, David, 2010. "Comparison of fixed versus variable biofuels incentives," Energy Policy, Elsevier, vol. 38(10), pages 5530-5540, October.
    2. Roberto Esposti, 2009. "Biofuels between International Markets, Policies and the Wto," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, December.
    3. Wallace E. Tyner, 2010. "The integration of energy and agricultural markets," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 193-201, November.
    4. Cui, Hao (David) & Tyner, Wally, 2017. "Modeling Land Intensification Response in GTAP: Implications for Biofuels Induced Land Use Change," Conference papers 332812, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Valdes, Constanza & Hjort, Kim & Seeley, Ralph, 2016. "Brazil’s Agricultural Land Use and Trade: Effects of Changes in Oil Prices and Ethanol Demand," Economic Research Report 242449, United States Department of Agriculture, Economic Research Service.
    6. Bai, Yun & Ouyang, Yanfeng & Pang, Jong-Shi, 2016. "Enhanced models and improved solution for competitive biofuel supply chain design under land use constraints," European Journal of Operational Research, Elsevier, vol. 249(1), pages 281-297.
    7. Hu, Kejia & Chen, Yuche, 2019. "Equilibrium fuel supply and carbon credit pricing under market competition and environmental regulations: A California case study," Applied Energy, Elsevier, vol. 236(C), pages 815-824.
    8. Elaheh Jafarnejad & Ahmad Makui & Ashkan Hafezalkotob & Amir Aghsami, 2024. "Governance intervention policies in the production competition of biofuels and fossil fuels: a pathway to sustainable development," Operations Management Research, Springer, vol. 17(2), pages 660-682, June.
    9. 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.
    10. Ziolkowska, Jadwiga & Simon, Leo K. & Zilberman, David, 2011. "Capturing Uncertainties in Evaluation of Biofuels Feedstocks: A Multi-Criteria Approach for the US," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115980, European Association of Agricultural Economists.
    11. Finco, Adele & Padella, Monica & Spinozzi, Romina & Benedetti, Andrea, 2010. "Biofuel And Policy Alternatives: A Farm Level Analysis," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 188088, International Consortium on Applied Bioeconomy Research (ICABR).
    12. Abbott, Philip C. & Hurt, Christopher & Tyner, Wallace E., 2009. "What's Driving Food Prices? March 2009 Update," Issue Reports 48495, Farm Foundation.
    13. Zheng, Qiujie & Shumway, C. Richard, 2012. "Washington biofuel feedstock crop supply under output price and quantity uncertainty," Energy Policy, Elsevier, vol. 48(C), pages 515-525.
    14. Bai, Yun & Ouyang, Yanfeng & Pang, Jong-Shi, 2012. "Biofuel supply chain design under competitive agricultural land use and feedstock market equilibrium," Energy Economics, Elsevier, vol. 34(5), pages 1623-1633.
    15. Delshad, Ashlie B. & Raymond, Leigh & Sawicki, Vanessa & Wegener, Duane T., 2010. "Public attitudes toward political and technological options for biofuels," Energy Policy, Elsevier, vol. 38(7), pages 3414-3425, July.

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