Economic Impacts of Biofuels

PloS one, 2018

Biofuels policies induce land use changes (LUC), including cropland expansion and crop switching, and this in turn alters water and soil management practices. Policies differ in the extent and type of land use changes they induce and therefore in their impact on water resources. We quantify and compare the spatially varying water impacts of biofuel crops stemming from LUC induced by two different biofuels policies by coupling a biophysical model with an economic model to simulate the economically viable mix of crops, land uses, and crop management choices under alternative policy scenarios. We assess the outputs of an economic model with a high-resolution crop-water model for major agricultural crops and potential cellulosic feedstocks in the US to analyze the impacts of three alternative policy scenarios on water balances: a counterfactual 'no-biofuels policy' (BAU) scenario, a volumetric mandate (Mandate) scenario, and a clean fuel-intensity standard (CFS) scenario incenti...

Sustainability, 2020

In the face of future climate change, Europe has encouraged the adoption of biofuel crops by its farmers. Such land-use changes can have significant impacts on the water balance and hydrological behavior of a system. While the heavy pesticide use associated with biofuel crops has been extensively studied, the water balance impacts of these crops have been far less studied. We conducted scenario analyses using the Soil and Water Assessment Tool (SWAT) to determine the effects of farm-scale biofuel crop adoption (rapeseed) on a basin’s water balance. We found that rapeseed adoption does not support the goal of developing a sustainable agricultural landscape in the Czech Republic. The adoption of rapeseed also had disproportionate effects on a basin’s water balance depending on its location in the basin. Additionally, discharge (especially surface runoff ratios), evapotranspiration, and available soil water content display significant shifts in the rapeseed adoption scenarios.

Environmental Research Letters, 2010

Biofuels account for 1-2% of global transportation fuel and their share is projected to continue rising, with potentially serious consequences for water resources. However, current literature does not present sufficient spatial resolution to characterize this localized effect. We used a coupled agro-climatic and life cycle assessment model to estimate the water resource impacts of bioenergy expansion scenarios at a county-level resolution. The study focused on the case of California, with its range of agroecological conditions, water scarcity, and aggressive alternative fuel incentive policies. Life cycle water consumption for ethanol production in California is up to 1000 times that of gasoline due to a cultivation phase that consumes over 99% of life cycle water use for agricultural biofuels. This consumption varies by up to 60% among different feedstocks and by over 350% across regions in California. Rigorous policy analysis requires spatially resolved modeling of water resource impacts and careful consideration of the various metrics that might act to constrain technology and policy options.

… Meeting, July 27-29 …, 2008

Feedstock production for large scale development of the U.S. ethanol industry and introduction of cellulose-to-ethanol technology will require extensive changes in land use and impact water demand and quality. This study compares two scenarios: attaining a 60 billion gallon per year target of ethanol by 2030 and a billion gallon per year biodiesel target by 2012 with cellulose-toethanol technology introduced in 2012 and also delayed until 2015. Results suggest water demands and quality will vary regionally with cellulosic feedstock production. Policy emphasis on reduced and no-till practices needs to be complementary to increased crop residue use.

2008

National interests in greater energy independence, concurrent with favorable market forces, have driven increased production of corn-based ethanol in the United States and research into the next generation of biofuels. The trend is changing the national agricultural landscape and has raised concerns about potential impacts on the nation's water resources. To help illuminate these issues, the National Research Council held a colloquium on July 12, 2007 in Washington, DC. This report, based in part on discussions at the colloquium, concludes that if projected future increases in use of corn for ethanol production do occur, the increase in harm to water quality could be considerable from the increases in fertilizer use, pesticide use, and soil erosion associated with growing crops such as corn. Water supply problems could also develop, both from the water needed to grow biofuels crops and water used at ethanol processing plants, especially in regions where water supplies are already overdrawn. The production of "cellulosic ethanol," derived from fibrous material such as wheat straw, native grasses, and forest trimmings is expected to have less water quality impact but cannot yet be produced on a commerical scale. To move toward a goal of reducing water impacts of biofuels, a policy bridge will likely be needed to encourage growth of new technologies, best agricultural practies, and the development of traditional and cellulosic crops that require less water and fertilizer and are optimized for fuel production.

GCB Bioenergy, 2017

The Southern High Plains (SHP) of Texas, where cotton (Gossypium hirsutum L.) is grown in vast acreage, and the Texas Rolling Plains (TRP), which is dominated by an invasive brush, honey mesquite (Prosopis glandulosa) have the potential for biofuel production for meeting the U.S. bioenergy target of 2022. However, a shift in land use from cotton to perennial grasses and a change in land management such as the harvesting of mesquite for biofuel production can significantly affect regional hydrology and water quality. In this study, APEX and SWAT models were integrated to assess the impacts of replacing cotton with Alamo switchgrass (Panicum virgatum L.) and Miscanthus 9 giganteus in the upstream subwatershed and harvesting mesquite in the downstream subwatershed on water and nitrogen balances in the Double Mountain Fork Brazos watershed in the SHP and TRP regions. Simulated average (1994-2009) annual surface runoff from the baseline cotton areas decreased significantly (P < 0.05) by 88%, and percolation increased by 28% under the perennial grasses scenario compared to the baseline cotton scenario. The soil water content enhanced significantly under the irrigated switchgrass scenario compared to the baseline irrigated cotton scenario from January to April and August to October. However, the soil water content was depleted significantly under the dryland Miscanthus scenario from April to July relative to the baseline dryland cotton scenario. The nitrate-nitrogen (NO 3-N) and organic-N loads in surface runoff and NO 3-N leaching to groundwater reduced significantly by 86%, 98%, and 100%, respectively, under the perennial grasses scenario. Similarly, surface runoff, and NO 3-N and organic-N loads through surface runoff reduced significantly by 98.9%, 99.9%, and 99.5%, respectively, under the post-mesquite-harvest scenario. Perennial grasses exhibited superior ethanol production potential compared to mesquite. However, mesquite is an appropriate supplementary bioenergy source in the TRP region because of its standing biomass and rapid regrowth characteristics.

Climate Change Economics, 2012

This paper examines the changes in land use in the U.S. likely to be induced by biofuel and climate policies and the implications of these policies for greenhouse gas (GHG) emissions over the 2007–2022 period. The policies considered here include a modified Renewable Fuel Standard (RFS) by itself as well as combined with a cellulosic biofuel tax credit or a carbon price policy. We use a dynamic, spatial, multi-market equilibrium model, Biofuel and Environmental Policy Analysis Model (BEPAM), to endogenously determine the effects of these policies on cropland allocation, food and fuel prices, and the mix of first- and second-generation biofuels. We find that the RFS could be met by diverting 6% of cropland for biofuel production and would result in corn prices increasing by 16% in 2002 relative to the business-as-usual baseline. The reduction in GHG emissions in the U.S. due to the RFS is about 2%; these domestic GHG savings can be severely eroded by emissions due to indirect land-us...

2011

The House Report 111-181 accompanying H.R. 2997, the 2010 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, requested the USDA's Economic Research Service (ERS) in conjunction with the Office of the Chief Economist, to conduct a study of land-use changes for renewable fuels and feedstocks used to produce them. This report summarizes the current state of knowledge of the drivers of land-use change and describes the analytic methods used to estimate the impact of biofuel feedstock production on land use. The models used to assess policy impacts have incorporated some of the major uncertainties inherent in making projections of future conditions, but some uncertainties will continue to exist. The larger the impact of domestic biofuels feedstock production on commodity prices and the availability of exports, the larger the international land-use effects are likely to be. The amount of pressure placed on land internationally will depend in part on how much of the land needed for biofuel production is met through an expansion of agricultural land in the United States. If crop yield per acre increases through more intensive management or new crop varieties, then less land is needed to grow a particular amount of that crop.

2011

This study looks at the land use impact of the biofuels expansion on both the intensive and extensive margin, and its environmental consequences. We link economic, geographical and environmental models by using spatially explicit common units of analysis and use remote sensing crop cover maps and digitized soils data as inputs. Land use changes are predicted via economic analysis of crop rotation choice and tillage under alternative crop prices, and the Environmental Policy Integrated Climate (EPIC) model is used to predict corresponding environmental impacts. The study focuses on Iowa, which is the leading biofuels hotspot in the U.S. due to intensive corn production and the high concentration of ethanol plants that comprise 28% of total U.S. production. We consider the impact of the biofuels industry both on current cropland and on land in the Conservation Reserve Program (CRP), a land set-aside program. We find that substantial shifts in rotations favoring continuous corn rotations are likely if high corn prices are sustained. This is consistent with larger scale analyses which show a shift of the current soybean production out of the Corn Belt. We find that sediment losses increase substantially on the intensive margin, while nitrogen losses increase less. Returning CRP land into production has a vastly disproportionate environmental impact, as non-cropped land shows much higher negative marginal environmental effects when brought back to row crop production. This illustrates the importance of differentiating between the intensive and extensive margin when assessing the expansion of biofuel production.

2011

The House Report 111-181 accompanying H.R. 2997, the 2010 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, requested the USDA&#39;s Economic Research Service (ERS) in conjunction with the Office of the Chief Economist, to conduct a study of land-use changes for renewable fuels and feedstocks used to produce them. This report summarizes the current state of knowledge of the drivers of land-use change and describes the analytic methods used to estimate the impact of biofuel feedstock production on land use. The models used to assess policy impacts have incorporated some of the major uncertainties inherent in making projections of future conditions, but some uncertainties will continue to exist. The larger the impact of domestic biofuels feedstock production on commodity prices and the availability of exports, the larger the international land-use effects are likely to be. The amount of pressure placed on land internationally will ...