Part of President Bush's energy policy is to encourage research aimed at reducing the cost of biomass-based motor fuels to become competitive with petroleum-based fuels. We use a dynamic, CGE model to investigate the economy-wide implications of successful implementation of this policy. We find in the long-run, 2020, that the U.S. would experience significant benefits arising from: (1) substitution of biomass whose price is likely to fall in the long-run for crude petroleum whose price is likely to rise; (2) reduction in the world price of crude petroleum; (3) increased employment; and (4) higher export prices.
Get full access to this article
View all access options for this article.
References
1.
National Energy Policy Development Group, National Energy Policy: Reliable, Affordable, and Environmentally Sound Energy for America's Future, Washington, DC, available at http://www.whitehouse.gov/energy/National-Energy-Policy.pdf, 2001, pp. 170.
RanesesA.HansonK.ShapouriH., Economic impacts from shifting cropland use from food to fuel, Biomass and Bioenergy, 1998, 15(6), 417–422.
5.
GallagherP.DikemanM.FritzJ.WailesE.GautherW.ShapouriH., Biomass from Crop Residuals: Cost and Supply estimates, Agricultural Economic Report Number 819, U.S. Department of Agriculture, Washington DC, 2003.
6.
De La Torre UgarteD.G.WalshM.E.ShapouriH.SlinskyS.P., The Economic Impacts of Bioenergy Crop Production on U.S. Agriculture, Agricultural Economic Report Number 816, U.S. Department of Agriculture, Washington DC, 2003.
DixonP.B.RimmerM.T., Dynamic General Equilibrium Modelling for Forecasting and Policy, North Holland Pub. Co., Amsterdam, 2002.
9.
DixonP.B.RimmerM.T.TheU.S.Economy from 1992 to 1998: Results from a detailed CGE model, Economic Record, Vol. 80, Special issue, September, 2004, S13–S23.
10.
Department of Energy, Annual energy outlook 2006 with projections to 2030, Energy Department, Energy Information Administration, Office of Energy Analysis and Forecasting, Washington DC, 2006.
11.
AdenA.RuthM.IbsenK.JechuraJ.NeevesK.SheehanJ.WallaceR., Lignocellulosic biomass to ethanol process design and economics utilizing co-current dilute acid prehydrolysis and enzymatic hydrolysis for corn stover. NREL/TP-510-32438. Golden, CO: National Renewable Energy Laboratory, 2002.
12.
U.S. International Trade Commission, The Economic Effects of Significant U.S. Import Restraints: Fourth Update 2004, Investigation No. 332–325, Publication 3701, Washington, June, 2004.
