Will EU Biofuel Policies Affect Global Agricultural Markets?

Posted: 27 Oct 2008

See all articles by Martin Banse

Martin Banse

Institute for Market Analysis and Agricultural Trade Policies

Hans van Meijl

Wageningen UR - Agricultural Economics Research Institute (LEI)

Andrzej Tabeau

Wageningen UR - Agricultural Economics Research Institute (LEI)

Geert Woltjer

Wageningen UR - Agricultural Economics Research Institute (LEI)

Abstract

This article assesses the implications of the EU Biofuels Directive (BFD) using a computable general equilibrium framework with endogenous land supply. The results show that, without policy intervention to stimulate the use of biofuel crops, the targets of the BFD will not be met. With the BFD, the enhanced demand for biofuel crops has a strong impact on agriculture globally and within Europe, leading to an increase in land use. On the other hand, the long-term declining trend in real agricultural prices may slow down or even reverse.

Keywords: biofuels, EU Biofuels Directive, agricultural markets, computable general equilibrium modelling, endogenous land supply

JEL Classification: F17, Q17, Q27, Q28

Suggested Citation

Banse, Martin and van Meijl, Hans and Tabeau, Andrzej and Woltjer, Geert, Will EU Biofuel Policies Affect Global Agricultural Markets?. European Review of Agricultural Economics, Vol. 35, No. 2, pp. 117-141, 2008, Available at SSRN: https://ssrn.com/abstract=1289129 or http://dx.doi.org/jbn023

Martin Banse (Contact Author)

Institute for Market Analysis and Agricultural Trade Policies ( email )

Bundesallee 50
Braunschweig 38116
Germany

Hans Van Meijl

Wageningen UR - Agricultural Economics Research Institute (LEI) ( email )

Burgemeester Patijnlaan 19
The Hague, 2502 LS
Netherlands
+31 70 335 8169 (Phone)
+31 70 361 5624 (Fax)

Andrzej Tabeau

Wageningen UR - Agricultural Economics Research Institute (LEI) ( email )

Burgemeester Patijnlaan 19
The Hague, 2502 LS
Netherlands

Geert Woltjer

Wageningen UR - Agricultural Economics Research Institute (LEI) ( email )

Burgemeester Patijnlaan 19
The Hague, 2502 LS
Netherlands

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