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The global indirect land use change (ILUC) implications of biofuel use in the United States of America (USA) from 2001 to 2010 are evaluated with a dynamic general equilibrium model.  The effects of biofuels production on agricultural land area vary by year; from a net expansion of 0.17ha per 1000 gallons produced (2002) to a net contraction of 0.13ha per 1000 gallons (2018) in Case 1 of our simulation.  In accordance with the general narrative about the implications of biofuel policy, agricultural land area increased in many regions of the world.  However, oil-export dependent economies e

ORNL Report ORNL/TM-2010-120.

Despite recent claims to the contrary, plant-based fuels developed in economically and environmentally sensible ways can contribute significantly to the nation’s— indeed, the world’s—energy security while providing a host of benefits for many people worldwide.

We quantify the emergence of biofuel markets and its impact on U.S. and world agriculture for the coming decade using the multi-market, multi-commodity international FAPRI (Food and Agricultural Policy Research Institute) model. The model incorporates the trade-offs between biofuel, feed, and food production and consumption and international feedback effects of the emergence through world commodity prices and trade.

This paper examines the impact of declining energy prices on biofuels production and use and its implications to agricultural commodity markets. It uses PEATSim, a dynamic partial equilibrium, multi-commodity, multi-country global trade model of the agriculture sector to analyze the interaction between biofuel, crop and livestock sectors. The ability of countries to achieve their energy goals will be affected by future direction of petroleum prices.

PEATSim (Partial Equilibrium Agricultural Trade Simulation) is a dynamic, partial equilibrium, mathematical-based model that enables users to reach analytical solutions to problems, given a set of parameters, data, and initial
conditions. This theoretical tool developed by ERS incorporates a wide range of domestic and border policies that enables it to estimate the market and trade effects of policy changes on agricultural markets. PEATSim captures

Agricultural markets often feature significant transport costs and spatially distributed production and processing which causes spatial imperfect competition. Spatial economics considers the firms’ decisions regarding location and spatial price strategy separately, usually on the demand side, and under restrictive assumptions. Therefore, alternative approaches are needed to explain, e.g., the location of new ethanol plants in the U.S. at peripheral as well as at central locations and the observation of different spatial price strategies in the market.

Energy security and environmental concerns about global climate change have lead to recent growth in the use of bio-fuels in the U.S. Brazil currently exports a substantial share of its sugarcane based ethanol to the U.S. to support the growing demand for bio-fuels. However, U.S. policies that exogenously affect the bio-fuel sector confound the understanding of the multi-market impacts of a growing bio-fuel demand. Moreover, the various forms of government intervention in the bio-fuel economy leave researchers with unclear conclusions about the prospects for bio-fuels.