This paper examines the extent to which biofuel production has been driven over time by the U.S. Renewable Fuel Standard (RFS) and the extent to which it was driven by non-RFS policies and market forces. While the RFS has played a critical role in providing a secure environment to produce and use more biofuels, at least in the 2000s, it was not the only factor that encouraged the biofuel industry to grow. While the existing literature has successfully identified the key drivers of the growth in biofuels, it basically has failed to properly quantify the impacts and contributions of each of these drivers separately. This paper develops short- and long-run economic analyses, using Partial Equilibrium (PE) and Computable General Equilibrium (CGE) models, to differentiate the economic impacts of the RFS from other drivers that have helped biofuels to grow. Results show: 1) the bulk of the ethanol production prior to 2012 was driven by what was happening in the national and global markets for energy and agricultural commodities and by the federal and sometimes state incentives for biofuel production; 2) the medium-to long-run price impacts of biofuel production were not large; 3) due to biofuel production, regardless of the drivers, real crop prices have increased between 1.1 and 5.5% in 2004–11 with only one-tenth of the price increases were assigned to the RFS, 4) for 2011–16, the long-run price impacts of biofuels were less than the time period of 2004–11, as in the second period biofuel production increased at much slower rate; 5) biofuel production, regardless of the drivers, has increased the US annual farm incomes by $8.3 billion between 2004–11 with an extra additional annual income of $2.3 billion between 2011–2016; 6) the modeling practices provided in this paper assign 28% of the expansion in farm incomes of the period of 2004–2011 and 100% of the extra additional incomes of the period of 2011–16 to the RFS.

The use of renewable fuels has emerged as an important method for reducing fossil‐fuel consumption. Different pathway technologies can lead to different fuel products. The feasibility of many such pathways has been analyzed with mixed results but new technologies are being developed continuously. This study uses stochastic analysis to determine the feasibility of producing biofuels from carinata oil using catalytic hydrothermolysis (CH) technology. We perform the analysis with and without government incentive programs. We also address uncertainties in input costs and government incentives. The study analyzes a pioneer greenfield plant. The results show that the mean net present value (NPV) without government incentives is −$924.4 million. Ninety percent of the simulated NPV is between −$1040 million and −$810 million, which indicates a 100% probability of loss. The mean breakeven price of jet fuel is $4.72 gal –1 . With government incentives including Renewable Identification Number (RIN) and Low Carbon Fuel Standard (LCFS), the mean NPV is $62.3, and the probability of loss is reduced to 21%, which makes the process much more financially feasible. © 2021 Society of Chemical Industry and John Wiley & Sons, Ltd

This paper evaluates in a holistic way major trends in US production of food, feed, and biofuel commodities over the period 1961-2014. It is motivated by literature that examines parts of the changes but does not integrate them. We develop a comprehensive data set and then conduct analysis of the major trends that emerge. We identify eight major trends and then combine them to four major themes. The first theme is the huge gain in agricultural productivity over this period. An important component of this theme is that the productivity gain was sufficient to achieve substantial total production growth as agricultural land declined over the period. Second, there has been a major transformation of the livestock sector as less efficient and more expensive beef has been replaced by more efficient and less expensive poultry. As this change has happened, the livestock sector has become more land efficient, less land used in livestock. The third major change is that US calorie production is now substantially more than the needs for food and feed. Finally, the first three major themes have enabled the fourth, which is growth of US renewable fuel production, while agricultural land declined over time.

Two financial incentives that have spurred the growth of renewable energy including wind farms are Production Tax Credits (PTC) and Property Tax Abatement (PTA). PTC provides a tax credit of 1¢–2¢ per kilowatt-hour for the first 10 years of electricity generation for utility-scale wind, and PTA is a rebate provided by the local governments to wind farms in the U.S. Midwestern states. Past researches suggest that the breaking-even of renewable energy projects can partly be attributed to PTC. However, in cognizance of the irregular availability of such incentives, there seems to exist a need for financial feasibility analysis of the wind farms. The study uses a stochastic method and a scenario approach to address this research question. The analysis considers the capital and operating costs, interest payments, local and federal taxes, and production of wind energy and sales revenues, and inherent uncertainties in key parameters. The results shed some light on the impacts of PTC and PTA on the financial feasibility of wind farms in the U.S. Midwestern states. It is observed that PTC is a more effective instrument compared to PTA. The paper concludes by discussing policy implications of local government rebates and federal incentives.

Sustainable aviation fuels (SAFs) are expected to play an essential role in achieving the aviation industries' goal of carbon-neutral growth. However, producing biomass-based SAFsmay induce changes in global land use and the associated carbon stock. The induced land use change (ILUC) emissions, as a part of the full life-cycle emissions for SAF pathways, will affect whether and to what extent SAFs reduce emissions compared with petroleum-based jet fuels. Here, we estimate the ILUC emission intensity for seventeen SAF pathways considered by the International Civil Aviation Organization (ICAO), covering five ASTM-certified technologies, nine biomass-based feedstocks, and four geographical regions. We introduce the SAF pathways into a well-established computable general equilibrium (CGE) model, GTAP- BIO, and its coupled emission accounting model, AEZ- EF, to study economy-wide implications of SAF production and estimate ILUC emissions intensity for each pathway. The estimated SAF ILUC emission intensities, using a 25-year amortization period, range from -58.5 g CO(2)e MJ(-1) for the USA miscanthus alcohol (isobutanol)-to-jet (ATJ) pathway to 34.6 g CO(2)e MJ(-1) for the Malaysia & Indonesia palm oil Hydrotreated Esters of Fatty Acids (HEFA) pathway. Notably, the vegetable oil pathways tend to have higher ILUC emission intensities due to their linkage to palm expansion and peatland oxidation in Southeast Asia. The cellulosic pathways studied provide negative ILUC emissions, mainly driven by the high carbon sequestrations in crop biomass and soil. Using the core life-cycle emissions established by ICAO, we show that fifteen of the assessed pathways have a lower full life-cycle emission intensity than petroleum-based jet fuels (89 g CO(2)e MJ(-1)), offering promising options to reduce aviation emissions. (C) 2021 The Authors. Published by Elsevier B.V.

This paper reviews the use of computable general equilibrium (CGE) models, especially GTAP based models, in the evaluation of biofuels policies. In this particular area of research, CGE models have been used in several different ways – estimating the induced land use change (ILUC) and associated greenhouse gas (GHG) emissions caused by increases in biofuels production; estimating the impacts of biofuels production on crop and food production and prices; estimating the economic or welfare impacts of policies aimed at stimulating biofuel production; and evaluating the interactions between biofuels and livestock production. Clearly the area that has gotten the most attention is the ILUC area. The California Air Resources Board (CARB) used GTAP to estimate the carbon scores in used in its Low Carbon Fuel Standard (LCFS). The European Commission reported estimates for ILUC provided by IFPRI and the MIRAGE model. The second major area to be covered concerns the evaluation of food-fuel tradeoffs. Biofuels have been criticized for causing food price increases. Here we will explore the literature in this area, which sometimes is quite contradictory. The third area to be covered is economic and welfare impacts of biofuels. In general, the studies conclude that mandating or subsidizing biofuels is welfare reducing because they are more expensive than fossil fuels. Most of the analyses do not estimate the societal benefits of GHG reduction due to biofuels, so there is no balancing of the pure economic losses with the environmental gains. The fourth grouping concerns the impacts of biofuel programs on the global livestock sector. Since ethanol has an animal feed co-product, and oilseed biodiesel involves production of oilseed meals used as animal feed, there is a close linkage between biofuels and the livestock sector. We conclude with a discussion of possible future directions for research on this topic.

This paper quantifies the impact of different policy options on the economic viability of sustainable aviation fuel (SAF) production technologies. The pathways considered include isobutanol to jet from corn grain, hydroprocessed esters and fatty acids (HEFA) from inedible fats and oils, HEFA from palm fatty acid distillate, synthesized iso-paraffins from sugarcane, Fischer-Tropsch (FT) gasification and synthesis from municipal solid waste, and micro FT from wood residues. The policies considered include feedstock subsidies, capital grants, output based incentives, and two policies intended to reduce project risk. Stochastic techno-economic analysis models are used to quantify the policies’ impact on project net present value and minimum selling price of the middle distillate fuel products. None of the technology pathways studied are found to be financially viable without policy aid. The median total policy costs required for economic viability range from 35 to 337 million USD per production facility, or 0.07–0.71 USD/liter. Our results indicate that the cumulative impact of multiple policies, similar in magnitude to analogous real-world fuel policies, could result in economically viable SAF production.

The oilheat industry is in the middle of a dramatic transformation. The fuel that heats more than six million homes in the northeastern United States is rapidly losing both volume and market share. The subsequent economic consequences for oilheat retailers has driven the industry to reshape its image by fundamentally changing the composition of its core product. Oilheat retailers are delivering biodiesel-blended fuel oil and advocating for fuel quality standards that assure that consumers are heating with a low-sulfur renewable fuel. This change in fuel composition is providing a viable market for biodiesel producers.

Nitrogen is the most limiting plant nutrient. Inexpensive natural gas has substantially reduced costs of ammonia fertilizer for intensive agriculture in the developed world, but its excessive use negatively impacts downstream ecosystems. By contrast, the availability of ammonia fertilizer is a major economic bottleneck for agriculture in developing countries. A dedicated lignocellulosic biomass crop could supply sufficient substrate to generate optimal nitrogen fertilizer on less than 5% of a grower's food crop acreage. Reimagining ammonia generation using biomass could significantly enhance sustainable agricultural productivity in developing countries when combined with emerging catalytic technologies. (c) 2020 Society of Chemical Industry and John Wiley & Sons, Ltd

Chinese Tariffs and Forest Loss in Brazil In 2018, the Chinese government implemented a series of wide-ranging retaliatory tariffs on many U.S. export products (U.S. Department of Agriculture, 2019a). Many of the new tariffs targeted U.S. agricultural products, including soybeans. When enacted, the new tariffs briefly drove the soybean price ratio between New Orleans and Paranagua, Brazil’s principal port for soybean exports, to historic levels (CEPEA/ESALQ, 2019; FAO, 2018) and dropped U.S. soybean prices to under $9/bu, their lowest market level of the decade (U.S. Department of Agriculture, 2019b). In late 2018 and early 2019, U.S. soybean exports to China ground to a near halt, dropping by 20 million tons, or nearly 70% over the previous 12 months (U.S. Department of Agriculture, 2019c). U.S. exports had been largely supplanted South American soybeans. Brazil alone increased exports to China by approximately 10 million tons (SECEX, 2020).

Sound economic modelling of land use in global economic models is critical for evaluating agricultural, biofuel, and climate policies. Current approaches do not preserve physical land area, do not account for the fact that land is of different qualities, or do not explicitly include the cost of converting land from one use to another. This study proposes a land use modelling framework building on the additive form of the constant elasticity of transformation (ACET) approach. We demonstrated that the framework could (1) directly provide traceable physical land use results, (2) flexibly handle land productivity differences based on biophysical information, (3) explicitly introduce land conversion cost, and (4) provide welfare decomposition in light of land heterogeneity and conversion cost. An experiment of mandating a 10 percent increase in grain consumption in the US food sector showed that ignoring land heterogeneity and conversion cost would underestimate the welfare loss by 28 percent.

Abstract Background It has been argued that the US biofuel policy is responsible for the land use changes in Malaysia and Indonesia (M&I). In this paper, following a short literature review that highlights the relevant topics and issues, we develop analytical and numerical analyses to evaluate the extent to which production of biofuels in the US alters land use in M&I. The analytical analyses make it clear that market-mediated responses may generate some land use change in M&I due to biofuel production in the US. These analyses highlight the role of substitution among vegetable oils in linking these economies in markets for vegetable oils. To numerically quantify these effects, we modified and used a well-known Computable General Equilibrium model (CGE), GTAP-BIO. We conducted some sensitivity tests as well. Results According to the simulation results obtained from two base case scenarios for corn ethanol and soy biodiesel, we find that producing 15 BGs of corn ethanol and 2 BGs gallons of soy biodiesel together could potentially increase area of cropland in M&I by 59.6 thousand hectares. That is less than 0.5% of the cropland expansion in M&I for the time period of 2000–2016, when biofuel production increased in the US. The original GTAP-BIO model parameters including the regional substitution rates among vegetable oils were used for the base case scenarios. The estimated induced land use change (ILUC) emissions values for corn ethanol and soy biodiesel are about 12.3 g CO2e MJ−1, 17.5 g CO2e MJ−1 for the base case scenarios. The share of M&I in the estimated ILUC emissions value for corn ethanol is 10.9%. The corresponding figure for soy biodiesel is much higher, 78%. The estimated ILUC emissions value for soy biodiesel is sensitive with respect to the changes in the regional rates of substitution elasticity among vegetable oils. That is not the case for corn ethanol. When we replaced the original substitution elasticities of the base case, which are very large (i.e., 5 or 10) for many regions, with a small and uniform rate of substitution (i.e., 0.5) across the world, the ILUC emissions value for soy biodiesel drops from 17.5 g CO2e MJ−1 to 10.16 g CO2e MJ−1. When we applied larger substitution elasticities among vegetable oils, the estimated ILUC emissions value for soy biodiesel converged towards the base case results. This suggests that, other factors being equal, the base case substitution elasticities provide the largest possible ILUC emissions value for soy biodiesel. Finally, our analyses clearly indicate that those analyses that limit their modeling framework to only palm and soy oil and ignore other types of vegetable oils and fats provide misleading information and exaggerate about the land use implications of the US biofuels for M&I. Conclusion (1) Production of biofuels in the US generates some land use effects in M&I due to market-mediated responses, in particular through the links between markets for vegetable oils. These effects are minor compared to the magnitude of land use change in M&I. However, because of the high carbon intensity of the peatland the emissions fraction of M&I is larger, in particular for soy biodiesel. (2) The GTAP-BIO model implemented a set of regional substitution elasticities among vegetable oils that, other factors being equal, provides the largest possible ILUC emissions value for soy biodiesel. (3) With a larger substitution elasticity among all types of vegetable oils and animal fats in the US, less land use changes occur in M&I. That is due to the fact that a larger substitution elasticity among vegetable oils in the US, diverts a larger portion of the additional demand for soy oil to non-palm vegetable oils and animal fats that are produced either in the US or regions other than M&I. (4) Those analyses that limit their modeling framework to only palm and soy oils and ignore other types of vegetable oils and fats provide misleading information and exaggerate about the land use implications of the US biofuels for M&I.

Morocco is expected to be faced with a major water shortfall prompted by either expansion in demand for water or reduction in precipitation induced by climate change. This paper examines the economywide impacts of these factors for Morocco. It uses a computable general equilibrium model augmented with submodules that trace consumption of water by uses and land allocation across sectors including crops, livestock, and forestry. Results show that water scarcity and changes in crop yields induced by climate change could reduce the GDP of Morocco up to 6.7 billion US dollars per year at 2016 constant prices and eliminate many job opportunities, in particular in the rural areas of this country. Only a portion of these negative impacts can be removed with improvements in water use efficiency. The factors mentioned above will reduce productivity of Morocco’s cropland and have the potential to reduce irrigated areas. Due to these changes, production of crops and food products are expected to fall, with increases in crop prices by up to 14.3 percent, assuming other factors being equal. Investment in water use efficiency practices that save water, in particular in agricultural activities, and shifting toward more valuable and less water intensive crops can help to partially mitigate these adverse impacts.

Constant Elasticity of Transformation (CET) functions are widely used to allocate land across uses in Computable General Equilibrium ( CGE) models. These models fail to maintain the physical area of land in balance. This paper examines this issue. It shows that heterogeneity in land prices (rents) is the main source of imbalance in land area, not the curvature of the CET function. It also shows that the available approaches that restore balance to physical area either introduce ad hoc adjustments in land allocation or undermine the conventional welfare assessments of the CET results. An alternative approach involves implementing stochastic productivity distribution functions (e.g. Frechet distribution) to allocate land among uses maintain area of land in balance, thereby respecting conventional welfare assessments. A particular feature of these models is that the aggregate production functions of the land using sectors exhibit decreasing returns to scale even if land is the only factor of production. This approach also requires equalization of land rents across uses. This is not consistent with empirical observation. Both the CET and stochastic methods consider the implicit opportunity costs of moving land across uses but fail to take into account preparation costs associated with land use conversion.

Much attention has been paid to the effects of multiple soil conservation and soil health practices on the mean yield of the subsequent crop. Much less research has focused on the variability of crop yields over time or space. Yield stability reported in standard deviation, mean absolute deviation, or coefficient of variation can be an important measure of risk for producers. Risk reduction has economic value, and understanding the effect of tillage and other soil conservation practices on yield risk is relevant to farm financial management and crop insurance risk assessment. We used data from test plots in a corn (Zea mays L.)-soybean (Glycine max L.) rotation, spanning from 2003 to 2011 to assess differences in yield stability over time and space. In this experiment, each plot was randomly assigned to a treatment of no-till with no cover crop (NTNC), no-till with an annual ryegrass (Lolium multiflorum Lam.) cover crop (NTCC), or a control group using conventional tillage with no cover crop (CTNC). The statistical analysis made three relevant comparisons: (1) NTCC versus NTNC, (2) NTNC versus CTNC, and (3) NTCC versus CTNC. The analysis also included separating temporal and spatial variation using a time-first approach from the literature, followed by testing for differences between groups. We employed a standard deviation ratio test, Levene's test, and coefficient of variation t-test. Additionally, analysis of temporal volatility was conducted using ordinary least squares regression and associated t-tests in a method similar to a stock beta, a technique commonly accepted in finance to measure the volatility of an investment. We propose this as a new method in analyzing the temporal volatility in crop yields. We found that no-till reduced average temporal yield variation in corn, and that cover crops reduced average spatial variation in corn. These results were robust over multiple statistical tests. Using the beta coefficient methodology proposed in this paper, we found in both corn and soybeans that NTNC and NTCC had lower temporal yield volatility relative to a benchmark yield from the CTNC group. However, the beta coefficients were, in most cases, not statistically significant. The results of this study suggest that both no-till and cover crops may help reduce yield risk for Midwestern farmers while reducing soil and nutrient loss.

Morocco is expected to be faced with a major water shortfall prompted by either expansion in demand for water or reduction in precipitation induced by climate change. This paper examines the economywide impacts of these factors for Morocco. It uses a computable general equilibrium model augmented with submodules that trace consumption of water by uses and land allocation across sectors including crops, livestock, and forestry. Results show that water scarcity and changes in crop yields induced by climate change could reduce the GDP of Morocco up to 6.7 billion US dollars per year at 2016 constant prices and eliminate many job opportunities, in particular in the rural areas of this country. Only a portion of these negative impacts can be removed with improvements in water use efficiency. The factors mentioned above will reduce productivity of Morocco’s cropland and have the potential to reduce irrigated areas. Due to these changes, production of crops and food products are expected to fall, with increases in crop prices by up to 14.3 percent, assuming other factors being equal. Investment in water use efficiency practices that save water, in particular in agricultural activities, and shifting toward more valuable and less water intensive crops can help to partially mitigate these adverse impacts.

The extent to which agricultural trade liberalisation can be an adaptation strategy in the face of climate change remains to be an open discussion in the literature. We set out to answer this question in the context of Morocco and Turkey by taking into account the impact of climate change on agricultural international markets at the global level. We use the GTAP model, combined with a newly developed global database on climate change impacts on agricultural crop sectors by 2050 as captured by yield projections. Results suggest that the more trade is liberalised, the higher global welfare gains are. However, the gains are not large enough to offset the loss from climate change impacts on agricultural productivity globally. In Morocco, agricultural trade liberalisation, on average, induces additional welfare losses. The main drivers are the deterioration in the terms of trade that offsets all the potential gains from the better allocation of economic resources due to free trade. For Turkey, trade liberalisation induces net welfare gains under all scenarios. The larger the tariff elimination scheme, the larger the net gains due to the more efficient allocation of economic resources, which partially offset the impact of declining terms of trade.