IATRC Annual Meeting
December 7-9, 2008
"Biofuels, Agriculture, and Trade"
Organizers: Harry de Gorter, Cornell University and Ian Sheldon, Ohio State University
The Economics of Trade, Biofuels and the Environment (pdf)
Gal Hochman, Steven Sexton, and David Zilberman
This work extends traditional trade models to consider energy and the environment by introducing
energy as ubiquitous (intermediate) input, using a household model where energy enters directly into consumer decisions, and assuming externalities related to land and energy consumption. Under plausible conditions, globalization and capital flows increase demand for energy, leading to decline in food production and loss of environmental land. Identical technologies and similar resource constraints across countries are not sufficient for factor price equalization. Although the social optimal policy includes a land tax and an emission tax, under certain conditions the use of only one instrument may be worse to the environment, in contrast to no intervention at all. Furthermore, technological changes, e.g., agriculture biotechnology and second generation biofuels, are shown to lessen the land constraint.
Why Isn’t the Doha Development Agenda More Poverty Friendly? (pdf)
Thomas W. Hertel, Roman Keeney, Maros Ivanic, and L. Alan Winters
Critics of the Doha Development Agenda rightly point to the lack of aggressive reform in wealthy countries for its role in dampening developing country gains. We find that the absence of tariff cuts on staple food products in developing countries also critically limits poverty reduction in developing countries. Based on our analysis of the impacts of multilateral trade policy reforms in a sample of fifteen developing countries, we find there is some evidence of poverty increases in agriculture when the poor working in agriculture lose protection for their agricultural earnings. However, these effects are minimized when agricultural tariffs are cut in all developing countries, and when the impact of lower food prices on low income consumers is taken into account in our fifteen country sample.
Biofuels and Global Climate Change (pdf)
This paper reviews literature on the impacts of climate change and climate change policy on agriculture and forests. The review suggests that the range of results in the impact literature is widening rather than narrowing as more studies are added. To a large degree, however, the range of results appears to depend largely on uncertainty in the climate effects themselves. The climate change policy literature suggests that land use has a critical role to play if society decides to try to stabilize future climate at a low level of carbon dioxide in the atmosphere. This role includes converting substantial land from agriculture into forests, and these changes would also have large impacts on land rental rates. Compared to the large potential impacts of climate policy, the implications of biofuels for carbon emissions are relatively benign.
Independence through Diversification: Brazil’s Ethanol Contribution to Energy Security (pdf)
WTO Disciplines and Biofuels: Opportunities and Constraints in the Creation of a Global Marketplace (pdf)
Robert Howse, Petrus van Bork, and Charlotte Hebebrand
Enthusiasm for biofuel as an alternative to fossil fuel has emerged from many corners. Interest groups, with causes as varied as national security, the environment, rural development, and poverty alleviation, have looked to this alternative energy source to address their concerns. However, biofuels’ contribution to the world energy supply today is miniscule; in order for this alternative technology to address the above issues, production would have to scale up considerably.
Biofuel Policies in a Second Best Setting
(paper not available)