THE ECONOMICS OF
BIOFUELS
Please click on the titles below for
each speaker's presentation.
“Modeling
the Interdependence of Energy, Agriculture, and the Environment”
Ujjayant Chakravorty, University of Central Florida
We
present an economic framework for addressing the adoption of biofuels
when fossil fuels are scarce and land is allocated to the production of
food and clean energy. As energy prices rise because of scarcity, the
rising price of energy makes it economical to produce energy from land.
Under pollution regulation, the switch to clean energy may be
exacerbated and land may be taken out of food production. There may be
supply discontinuities depending on the availability of land and the
stringency of environmental regulation. We show how this framework may
be extended to address issues such as varying land quality and
pollution abatement technologies.
Ujjayant Chakravorty is a Professor of Economics at the UCF Business
School and a visiting professor at the University of Toulouse and the
Institut National de la Recherche Agronomique (INRA) in France. His
main research areas are resource and environmental economics. He has
worked on the economics of energy, including the pricing of oil, coal,
and other fossil fuels, the effect of environmental regulation on
energy prices, and the economics of clean energy alternatives. Ujjayant
has held tenured faculty positions at Emory University in Atlanta and
at the University of Hawaii at Manoa. He has lectured and held visiting
positions at several universities in North America, Europe, and Asia
and consulted extensively with international organizations. His
research has been published in academic journals including the American
Economic Review, Journal of Political Economy, Econometrica, the
Journal of Economic Dynamics and Control, the Journal of Environmental
Economics and Management, American Journal of Agricultural Economics,
Energy Journal, and OPEC Review. He is co-editor of the book, India and
Global Climate Change: Perspectives on Economics and Policy from a
Developing Country, published in 2003 by the RFF and Oxford University
Press. Ujjayant has a B.S. in Civil Engineering from IIT Delhi (1979)
and a Ph.D. in Resource and Environmental Economics from the University
of Hawaii at Manoa (1989).
“Technologies and
Governance for a Sustainable Biofuels Industry”- unavailable
Alex Farrell, UC Berkeley
The
only thing that may be changing faster than biofuel technologies are
the social expectations for the biofuel industry, which creates
significant uncertainly and risk for policymakers, innovators, and
investors alike. This presentation will sketch out what a sustainable
biofuels industry—one that is economically viable, socially acceptable,
and protects the environment—could look like, and what characteristics
biofuel technologies for a sustainable industry must have. The key
issue appears to be the relationship between land use and feedstock
production and, roughly speaking, the less arable land used the more
sustainable the biofuels industry is likely to be. Much of the current
research in biofuel technologies will enable and encourage a shift away
from feedstocks produced on arable land. This change in direction may
clash with the agricultural orientation of the current biofuels
industry and policies. Potential implications of these trends will be
discussed.
Alex Farrell is an Associate Professor in the Energy and Resources
Group at the University of California at Berkeley and is Director of
the UC Berkeley Transportation Sustainability Research Center. He has a
degree in Systems Engineering from the U.S. Naval Academy and worked as
an engineer onboard a nuclear submarine and for Air Products and
Chemicals, Inc. Alex received his Ph.D. in Energy Management and Policy
from the University of Pennsylvania and then worked as a research
fellow at Harvard, and as a research engineer at Carnegie Mellon
University, where he remains part of the Climate Decision Making
Center. Alex was co-director of two studies for the state of
California: Managing Greenhouse Gases In California, and A Low Carbon
Fuel Standard for California, and is participating in several
international projects on the governance of biofuels.
“The Economics of
Future Biofuels Policy Alternatives”
Wally Tyner, Purdue University
This
presentation will review the history of U.S. ethanol policy, explain
how biofuel production is facilitated by high oil prices, a tax credit
for ethanol consumption and price premiums for ethanol (in part due to
mandates), and outline some policy alternatives that could be
considered for the future. In addition to the current policy set, other
alternatives included are 1) a lower fixed subsidy; 2) a subsidy that
varies with the price of crude oil; 3) a much higher alternative fuel
standard (mandate) such that companies are required to use a certain
percentage of alternative fuels; 4) a combination of a higher
alternative fuel standard with a variable subsidy; and 5) new incentive
designs that incorporate both a national security component based on
petroleum displaced and a GHG emissions reduction component.
Results are provided in terms of the breakeven between corn and oil
prices, incorporating the three components of the market value of
ethanol: energy, additive, and subsidy. The policy set we choose
will be critical in achieving our national energy security objectives.
Wallace E. Tyner is a Professor with the Department of Agricultural
Economics, Purdue University. He received his B.S. degree in
chemistry (1966) from Texas Christian University, and his M.A. (1972)
and Ph.D. (1977) degrees in economics from the University of Maryland.
Professor Tyner’s research interests are in the area of energy,
agriculture, and natural resource policy analysis and structural and
sectoral adjustment in developing economies. He has over 100
publications in these areas including three books and 48 refereed
papers and abstracts. His past work in energy economics has
encompassed oil, natural gas, coal, oil shale, biomass, ethanol from
agricultural sources, and solar energy. His current research
focuses on renewable energy policy issues. He teaches a graduate
course in benefit-cost analysis, which incorporates risk into the
economic and financial analysis of investment projects.