Abolishing biofuel policies: Possible impacts on agricultural price levels, price variability and global food security

Enciso, Sergio René Araujo; Fellmann, Thomas; Domínguez, Ignácio Pérez; Santini, Fabien

doi:10.1016/j.foodpol.2016.01.007

Cited by 48 publications

(22 citation statements)

References 22 publications

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“…Finally, under the extreme scenario of eliminating EU bioenergy support (NoS), both nascent and conventional bioenergy sectors remain heavily dependent on EU policy support, a result supported by other studies [27,49]. Thus, this market mechanism is an important ingredient for sustaining incomes, employment and development in rural areas, as bioenergy (feedstock) production is especially located in these areas.…”

Section: Discussionmentioning

confidence: 90%

The Good, the Bad and the Uncertain: Bioenergy Use in the European Union

et al. 2018

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As the EU is moving towards a low carbon economy and seeks to further develop its renewable energy policy, this paper quantitatively investigates the impact of plausible energy market reforms from the perspective of bio-renewables. Employing a state-of-the-art biobased variant of a computable general equilibrium model, this study assesses the perceived medium-term benefits, risks and trade-offs which arise from an advanced biofuels plan, two exploratory scenarios of a more ‘sustainable’ conventional biofuels plan and a ‘no-mandate’ scenario. Consistent with more recent studies, none of the scenarios considered present significant challenges to EU food-security or agricultural land usage. An illustrative advanced biofuels plan simulation requires non-trivial public support to implement whilst a degree of competition for biomass with (high-value) advanced biomass material industries is observed. On the other hand, it significantly alleviates land use pressures, whilst lignocellulose biomass prices are not expected to increase to unsustainable levels. Clearly, these observations are subject to assumptions on technological change, sustainable biomass limits, expected trends in fossil fuel prices and EU access to third-country trade. With these same caveats in mind, the switch to increased bioethanol production does not result in significant market tensions in biomass markets.

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Section: Discussionmentioning

confidence: 90%

The Good, the Bad and the Uncertain: Bioenergy Use in the European Union

et al. 2018

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“…However, the spillover effect from the ethanol to the corn market can only be observed using the daily data. Enciso et al (2016) employed the Aglink-Cosimo model to investigate the impact of removing biofuel-related policies on the biofuel and agricultural commodity prices and volatilities. According to their results, the biofuel policies can increase biofuel production, consumption, and prices, and reduce their volatilities.…”

Section: Literature Reviewmentioning

confidence: 99%

Modeling the Impact of Agricultural Shocks on Oil Price in the US: A New Approach

Hồ

et al. 2019

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The current literature has generally considered prices of the agricultural commodity as an endogenous factor to crude oil price. As such, the role of the agricultural market in the energy sector has been largely ignored. We argue that the expansion of agricultural production may trigger a significant increase in oil price. In addition, the world has recently witnessed a growth in biofuel production, leading to an increase in the size of the agricultural sector. This study is conducted to examine the impact of different agricultural shocks on the oil and agricultural markets in the US for the period from 1986 to 2018. The study utilizes the Structural Vector Autoregressive (SVAR) model to estimate the relationship between the agricultural market and the crude oil market. Moreover, the variance decomposition is also used to quantify the contribution of agricultural demand shocks on oil price variations. Findings from this paper indicate that different agricultural shocks can have different effects on oil price and that corn use in ethanol plays an important role in the impact of corn demand shocks on oil price. We find evidence that the agricultural market can have an impact on oil prices through two main channels: indirect cost push effect and direct biofuel effect. Of these, the biofuel channel unexpectedly suggests that the expansion of bioethanol may in fact foster the dependency of the economy on fossil fuel use and prices.

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“…In contrast, there is no direct support for bio-based materials, which yield higher value added, and policy support is limited to R&D. This has raised concerns of a "non-level playing field" [88] that systematically prevents the development and investment in higher value added applications, such as bio-based chemicals and materials, due to higher prices and difficult access to biomass [89][90][91]. However, first assessments show that the abolition of biofuel policies would only have a moderate lowering impact on world agricultural commodity prices and no or only limited growth effect on the industrial use of biomass [80,92]. This indicates that fossil fuel prices and production costs of competing petrochemicals, based on the well-established and long-time optimised mass production of the chemical industry, are main determinants for the development of bio-based chemicals and materials.…”

Section: Broadening Portfolio Of Research Topics and Competing Value mentioning

confidence: 99%

Bioeconomy Strategies: Contexts, Visions, Guiding Implementation Principles and Resulting Debates

Meyer

2017

Sustainability

165

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Over the last decade, bioeconomy policies, guided by integrated bioeconomy strategies, have developed. This paper presents a systematic and comparative analysis of official bioeconomy strategies of the EU, Germany, OECD, Sweden and the USA with regard to their context, visions and guiding implementation principles. In an additional step, the relationship between these strategies and important scientific and societal debates around bioeconomy is assessed. In conclusion, five major stumbling blocks for the further development of the bioeconomy are worked out. First, there is the risk of disappointment because far-reaching promises of the strategies are difficult to achieve. Second, the bioeconomy is not the only way to a low carbon economy so alternatives could impede the desired development. Third, persistent conflicts between the different uses of biomass for food, material and energy production could lead to unstable policy support with short-term shifts. Fourth, a broader success of new bioeconomy value chains could trigger new societal conflicts over bioeconomy if efficiency gains, cascading use, residue use and sustainability certification are not sufficient to ensure a sustainable supply of biomass. Fifth, the acceptance of bioeconomy could be compromised if bioeconomy policies continue to ignore the on-going societal debates on agriculture and food.

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Abolishing biofuel policies: Possible impacts on agricultural price levels, price variability and global food security

Cited by 48 publications

References 22 publications

The Good, the Bad and the Uncertain: Bioenergy Use in the European Union

The Good, the Bad and the Uncertain: Bioenergy Use in the European Union

Modeling the Impact of Agricultural Shocks on Oil Price in the US: A New Approach

Bioeconomy Strategies: Contexts, Visions, Guiding Implementation Principles and Resulting Debates

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