Biofuels, Land Use, and Poverty
Presented by Farzad Taheripour
Based on joint work with
Wallace E. Tyner and Thomas W. Hertel
Washington Dialogue Series
Trade and Climate Change: Development Aspect of Climate
Policies of OECD Countries
Washington DC
5 May 2009
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Global Biofuel Production
• More than 13 billion gallons of bio-ethanol and about 2 billion
gallons of biodiesel were produced globally in 2007.
• Many countries, in particular the United States and the European
Union, have defined programs to boost biofuel production:
– US: 15 billion gallons corn based ethanol in 2015
– EU: 5.75% of renewable fuel use in 2010 and 10% by 2020.
• This large scale increase in biofuels production could have
profound implications on global agricultural output, trade, and
land use
• They could affect distribution of income and poverty across the
world as well.
Links between Biofuels, Agriculture,
Livestock, and Other Activities in GTAP
Crude Vegetable oil
Vegetable Oil
Industry
Biofuels
Industries
Oilseeds
Agriculture
Land
Rest of Economy
DDGS
Oilseed meals
Livestock
Industries
Measuring Global Economic and Environmental
Impacts of Biofuels
 To evaluate the global economic and environmental impacts of biofuel
production we use a modified version of the GTAP model which:
 Is global in scope,
 Links global production, consumption, and trade of goods and services,
 Links energy, biofuels, and agricultural markets,
 Links crop, livestock, and forestry activities through the land market at the Agro
Ecological Zones (AEZ) level,
 Takes into account production, consumption, and trade of biofuels by-products,
 Is augmented with a poverty module.
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Applications of GTAP-BIO Model and Database
 GTAP-BIO model has been used in several studies including:





Assessment of the US and EU biofuel mandate policies,
Evaluation of land use implications of US biofuel policy,
Measuring land use emissions due to biofuel production,
Consequences of biofuel expansion for livestock industry,
Poverty implications of biofuel expansion.
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Changes in Agricultural Outputs Due to EU and US
Biofuel Mandates Designed for 2015
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Impacts of EU and US Mandates on Feed Rations
Shares of coarse grains, DDGS, and oilseed meals in animal feed
rations without and with biofuel mandates
Dairy Farms
Other Ruminants
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Non-Ruminant
Land Use Changes Due to the US Ethanol Program
Change in
ethanol
Change in
Cropland (1000
Hectares)
2001 to 2006 to 7
2006
BG
719.1
542.7
7 to 9
BG
9 to 11 11 to 13 13 to 15 2001 to 15
BG
BG
BG
BG
532.4
557.8
Percent
Within US
584.8
614.5
3551.4
Other Regions
80
70
60
50
40
30
20
10
0
2001 to 2006 2006 to 7 BG
7 to 9 BG
9 to 11 BG
11 to 13 BG 13 to 15 BG 2001 to 15 BG
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Land Use Changes Due to the US Ethanol Program
Shares of Forest and Grassland in Land Use Changes
Percent
100
50
0
2001 to 2006 2006 to 7 BG
7 to 9 BG
Hectare per 1000 Gallon
Ethanol
Forest
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
9 to 11 BG
11 to 13 BG
13 to 15 BG 2001 to 15 BG
Grassland
Land Needed to Expand US Ethanol Output
Marginal
Average
9
2001 to 2006 2006 to 7 BG
7 to 9 BG
9 to 11 BG
11 to 13 BG 13 to 15 BG 2001 to 15 BG
2001-15 BG
2001-13 BG
2001-11 BG
Marginal
2001-9 BG
2001-7 BG
2001-2006
13 to 15 BG
11 to 13 BG
9 to 11 BG
7 to 9 BG
2006 to 7 BG
2001 to 2006
Annualized Emissions
(Grams/Gallon of Ethanol)
Land Use Emissions Due to the US Ethanol Program
GHGs Emissions - 30 Years Woods Hole
2500
Average
2000
1500
1000
500
0
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Land Use Emissions Due to the US Ethanol Program
Searchinger et al. 2008 vs GTAP Results
Total Emissions for 30 years (million metric tons)
3801
Change in ethanol production (billion liters of ethanol)
55.92
Searchinger Total emissions for 30 years (grams per liter)
et al. (2008) Liters per gallon
Total emissions for 30 years (grams per gallon of ethanol)
GTAP
67972
3.785
257302
One year emissions (grams per gallon of ethanol )
8577
One year average emissions (grams per gallon of ethanol)
1931
One year marginal emissions (grams per gallon of ethanol)
2210
GTAP average 23% of Searchinger
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Poverty: Conceptual Framework
World prices
and quantities
Exchange
rate
Tariffs,
QRs
Tariff
revenue
Pass through, competition
Border price
Enterprises
Taxes, regulation,
distributors, procurement
Wholesale price
Profits
Wages
Employment
males
females
Retail price
Distribution, taxes,
regulation, co-ops
Co-operatives, technology,
random shocks
Household welfare
Prices, wages,
endowments,
profits, other income
elderly
young
Taxes
Spending
Poverty: Framework for Analysis and Data
 GTAP-BIO used to elicit national price and earnings impacts of
multilateral biofuel mandates,
 Armington specification dampens international price transmission
considerably, assume full transmission within country,
 Micro-simulation model used to evaluate individual household impacts,
 Medium term comparative static analysis,
 Sample of sixteen countries household data: Malawi, Mozambique,
Tanzania, Uganda, Zambia, : Bangladesh, Indonesia, Philippines,
Thailand, Vietnam, Brazil, Colombia, Chile, Mexico, Peru, Venezuela
 Stratification of households into 7 groups by earnings specialization (ag
self-employment, non-ag self-employment, wage labor (rural and urban),
transfer dependent, and diversified (rural and urban)).
Percent change in poverty
Poverty Impacts of EU and US Biofuels Mandates in
Sample of 16 Developing Countries
SC = Average / Average Absolute Value
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National poverty impacts of EU and US biofuel
Mandates (% change)
In Brazil urban poverty
dominates
In Indonesia: rural poverty is dominant
% change poverty
2
1
Ugan
Zamb
Tza
Moz
Malw
Chile
Braz
Vene
Peru
Colum
Mex
Viet
Thai
Bdesh
-2
phil
-1
Indo
0
-3
-4
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Thanks very much!
Questions and Comments
For more information:
http://www.ces.purdue.edu/bioenergy
http://www.agecon.purdue.edu/papers/
http://www.gtap.org
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