The Long Run Impact of Biofuels on Food Prices

Chakravorty, Ujjayant; Hubert, Marie-Hélène; Moreaux, Michel

doi:10.2139/ssrn.2104053

Cited by 4 publications

(5 citation statements)

References 14 publications

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“…Our work contributes to a large literature on the agricultural and land use impacts of U.S. carbon and biofuel policies. Recent studies focus primarily on the U.S. RFS and combinations of the RFS with ethanol subsidies or carbon taxes (Bento, Klotz, and Landry, 2012;Chakravorty et al, 2013;Keeney and Hertel, 2009;Chen et al, 2011). Consistent with our results, these studies find large increases in corn and total agricultural acreage under the RFS.…”

Section: Introductionsupporting

confidence: 89%

“…Given our focus on the U.S. agricultural and fuels sectors, a few words on the broader implications and limitations of our findings is warranted. First, Bento, Klotz, and Landry (2012), Chakravorty et al (2013), and others have shown U.S. carbon policies that substantially increase ethanol production can lead to carbon leakage in global land and fuel markets. While we use carbon factors that incorporate indirect land-use effects, interactions between crop, food and land markets could increase emissions beyond levels reported here.…”

Section: Discussionmentioning

confidence: 99%

“…Chen et al (2011) find the 2022 RFS increases total acres by 16.95 million and corn acres by 11.47 million. Chakravorty et al (2013) find the RFS increases U.S. land used for energy crop production by 148 million acres. However, there is no net increase in total cultivated land due to offsetting increases in food production elsewhere.…”

Section: Uncontrolled Emissionsmentioning

confidence: 93%

“…Consistent with our results, these studies find large increases in corn and total agricultural acreage under the RFS. Shifts in farming can lead to large food price effects, on the order of 17 to 20 percent (Chakravorty et al, 2013;Roberts and Schlenker, 2013). 3 A major contribution of our work is to contrast these effects across the RFS and alternate policies that achieve the same environmental goal.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Unintended Consequences of Carbon Policies: Transportation Fuels, Land-Use, Emissions, and Innovation

Holland¹,

Hughes²,

Knittel³

et al. 2015

The Energy Journal

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Renewable fuel standards, low carbon fuel standards, and ethanol subsidies are popular policies to incentivize ethanol production and reduce emissions from transportation. Compared to carbon trading, these policies lead to large shifts in agricultural activity and unexpected social costs. We simulate the 2022 Federal Renewable Fuel Standard (RFS) and find that energy crop production increases by 39 million acres. Land-use costs from erosion and habitat loss are between $277 and $693 million. A low carbon fuel standard (LCFS) and ethanol subsidies have similar effects while costs under an equivalent cap and trade (CAT) system are essentially zero. In addition, the alternatives to CAT magnify errors in assigning emissions rates to fuels and can over or under-incentivize innovation. These results highlight the potential negative efficiency effects of the RFS, LCFS and subsidies, effects that would be less severe under a CAT policy.

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Section: Introductionsupporting

confidence: 89%

Section: Discussionmentioning

confidence: 99%

Section: Uncontrolled Emissionsmentioning

confidence: 93%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Unintended Consequences of Carbon Policies: Transportation Fuels, Land-Use, Emissions, and Innovation

Holland¹,

Hughes²,

Knittel³

et al. 2015

The Energy Journal

View full text Add to dashboard Cite

show abstract

“…From 2007 onward, an upward trend in the prices of agricultural commodities can also be observed (Figure A4). Some studies have not found evidence that the price of ethanol significantly affects the price of agricultural commodities [9,10], with others pointing out that the increased price of commodities is related to the price of oil or that it has an influence on ethanol prices [11,12]; even so, there is empirical literature relating the increase in prices, or at least part of it, to the production of biofuels [8,[13][14][15][16][17]. Considering such an effect, the present study aimed to analyze the ethanol market and agricultural commodities (basic food) to identify whether or not this effect exists more broadly by considering the two main players of the ethanol market.…”

Section: Introductionmentioning

confidence: 99%

The Ethanol Market and Its Relation to the Price of Agricultural Commodities

et al. 2023

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In this article, we seek to present the synthesis of the global ethanol market in the United States (US) and Brazil by using caloric equivalence to empirically characterize the elasticity of supply and demand. We also seek to evaluate the relationship between world ethanol production and prices of agricultural commodities (wheat, rice, corn, soybeans and sugar) from 1981 to 2016 using climate-induced yield shocks as instrumental variables. The main results for the world market indicate that the production and demand for ethanol respond elastically to changes in commodity prices. The world ethanol production has no significant relationship with food prices. However, evaluation of the ethanol market and its interaction with the agricultural commodities market confirms the hypothesis that Brazilian ethanol is weakly related to the price of food.

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The social inefficiency of regulating indirect land use change due to biofuels

et al. 2017

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Efforts to reduce the indirect land use change (ILUC) -related carbon emissions caused by biofuels has led to inclusion of an ILUC factor as a part of the carbon intensity of biofuels in a Low Carbon Fuel Standard. While previous research has provided varying estimates of this ILUC factor, there has been no research examining the economic effects and additional carbon savings from including this factor in implementing a Low Carbon Fuel Standard. Here we show that inclusion of an ILUC factor in a national Low Carbon Fuel Standard led to additional abatement of cumulative emissions over 2007–2027 by 1.3 to 2.6% (0.6–1.1 billion mega-grams carbon-dioxide-equivalent (Mg CO2e−1) compared to those without an ILUC factor, depending on the ILUC factors utilized. The welfare cost to the US of this additional abatement ranged from $61 to $187 Mg CO2e−1 and was substantially greater than the social cost of carbon of $50 Mg CO2e−1.

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The Long Run Impact of Biofuels on Food Prices

Cited by 4 publications

References 14 publications

Unintended Consequences of Carbon Policies: Transportation Fuels, Land-Use, Emissions, and Innovation

Unintended Consequences of Carbon Policies: Transportation Fuels, Land-Use, Emissions, and Innovation

The Ethanol Market and Its Relation to the Price of Agricultural Commodities

The social inefficiency of regulating indirect land use change due to biofuels

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