Cost-Benefit Tests for GHG Emissions from Biofuel Production

Posted: 4 Jun 2010

See all articles by Harry de Gorter

Harry de Gorter

Cornell University - School of Applied Economics and Management

Yacov Tsur

Hebrew University of Jerusalem - Department of Agricultural Economics and Management

Abstract

Biofuel greenhouse gas (GHG)-reduction standards calculated via life-cycle assessment are shown to be biased, even when indirect land-use change is included, because they are based on physical GHG emissions and uptakes and on simple aggregates of balances. We offer a GHG-reduction standard for biofuel production free of these biases, expressed for a range of discount rates and an upper bound on the GHG payback period. A numerical example, based on previously used data, reveals that converting two land types into ethanol in Brazil satisfies our biofuel emissions test, whereas in the United States no land type satisfies our criterion.

Keywords: biofuel, cost-benefit, greenhouse gas, social discount rate, carbon price

JEL Classification: Q18, Q42, Q54, Q56

Suggested Citation

de Gorter, Harry and Tsur, Yacov, Cost-Benefit Tests for GHG Emissions from Biofuel Production. European Review of Agricultural Economics, Vol. 37, No. 2, pp. 133-145, 2010. Available at SSRN: https://ssrn.com/abstract=1617079 or http://dx.doi.org/jbq014

Harry De Gorter (Contact Author)

Cornell University - School of Applied Economics and Management ( email )

248 Warren Hall
Ithaca, NY 14853
United States
607-255-8076 (Phone)

Yacov Tsur

Hebrew University of Jerusalem - Department of Agricultural Economics and Management ( email )

P.O. Box 12
Rehovot, 76100
Israel

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