The Economics of a Blend Mandate for Biofuels

Gorter, Harry de; Just, David R.

doi:10.1111/j.1467-8276.2009.01275.x

Cited by 200 publications

(101 citation statements)

References 4 publications

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“…Based on analyses of U.S. corn ethanol production, they find that a biofuel blend mandate can increase or decrease retail fuel prices depending on the relative supply elasticities, but that a biofuel tax credit will always result in lower fuel prices, and hence increased consumption (de Gorter and Just 2009). If tax credits are implemented alongside biofuel blend mandates, the effect of the tax credit will be to subsidize fuel consumption instead of biofuels (relative to a mandate with no subsidy), which will have the effect of increasing oil dependency and CO 2 emissions (de Gorter and Just, 2009). Ethanol policies that affect corn prices can exacerbate the inefficiencies of farm subsidies (and vice versa).…”

Section: Policy Choice and Interactionsmentioning

confidence: 99%

Biofuel Economics in a Setting of Multiple Objectives & Unintended Consequences

Jaeger

Egelkraut

2011

SSRN Journal

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SummaryThis paper examines biofuels from an economic perspective and evaluates the merits of promoting biofuel production in the context of the policies' multiple objectives, life-cycle implications, pecuniary externalities, and other unintended consequences. The policy goals most often cited are to reduce fossil fuel use and to lower greenhouse gas emissions. But the presence of multiple objectives and various indirect effects complicates normative evaluation. To address some of these complicating factors, we look at several combinations of policy alternatives that achieve the same set of incremental gains along the two primary targeted policy dimensions, making it possible to compare the costs and cost-effectiveness of each combination of policies. For example, when this approach is applied to U.S.-produced biofuels, they are found to be 14 to 31 times as costly as alternatives like raising the gas tax or promoting energy efficiency improvements. The analysis also finds the scale of the potential contributions of biofuels to be extremely small in both the U.S. and EU. Mandated U.S. corn ethanol production for 2025 reduces U.S. petroleum input use by 1.75%, and would have negligible net effects on CO2 emissions; and although EU imports of Brazilian ethanol may look better given the high costs of other alternatives, this option is equivalent, at most, to a 1.20% reduction in EU gasoline consumption.

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Section: Policy Choice and Interactionsmentioning

confidence: 99%

Biofuel Economics in a Setting of Multiple Objectives & Unintended Consequences

Jaeger

Egelkraut

2011

SSRN Journal

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“…There is a rich literature on on the ethanol industry which is part of what we want to address in this study. Gorter and Just (2009) has studied on the economics of a blend mandate for biofuels [26].…”

Section: Chapter 3 Literature Reviewmentioning

confidence: 99%

Market competition and social welfare analysis for E10 and E85 with a game theory model

Yang¹

2013

IJSE

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“…In markets where biofuel mandates are used (e.g. most of the European Union), the price of biofuel tends to be closely related to the price of the feedstock (de Gorter, 2009). …”

Section: Indirect Costs  Internal Adaptation Costsmentioning

confidence: 99%