Potential Gains and Losses of Biofuel Production in Argentina: A Computable General Equilibrium Analysis

38 Pages Posted: 20 Apr 2016

See all articles by Omar O. Chisari

Omar O. Chisari

affiliation not provided to SSRN

Carlos Romero

Central University of Venezuela (UCV)

Carlos Romero

The World Bank

Govinda R. Timilsina

World Bank - Development Research Group (DECRG)

Date Written: July 1, 2012

Abstract

Argentina is one of the world's largest biodiesel producers and the largest exporter, using soybeans as feedstock. Using a computable general equilibrium model that explicitly represents the biofuel industry, this study carries out several simulations on two sets of issues: (i) international markets for biofuel and feedstock, such as an increase in prices of soybean, soybean oil, and biodiesel, and (ii) domestic policies related to biofuels, such as an introduction of biofuel mandates. Both sets of issues can have important consequences to the Argentinean economy. The simulations indicate that increases in international prices of biofuels and feedstocks would increase Argentina's gross domestic product and social welfare. Increases in international prices of ethanol and corn also can benefit Argentina, but to a lesser extent. The domestic mandates for biofuels, however, would cause small losses in economic output and social welfare because they divert part of biodiesel and feedstock from exports to lower-return domestic consumption. An increase in the export tax on either feedstock or biodiesel also would lead to a reduction in gross domestic product and social welfare, although government revenue would rise.

Keywords: Economic Theory & Research, Energy Production and Transportation, Transport Economics Policy & Planning, Renewable Energy, Food & Beverage Industry

Suggested Citation

Chisari, Omar O. and Romero, Carlos and Romero, Carlos and Timilsina, Govinda R., Potential Gains and Losses of Biofuel Production in Argentina: A Computable General Equilibrium Analysis (July 1, 2012). World Bank Policy Research Working Paper No. 6124. Available at SSRN: https://ssrn.com/abstract=2104034

Omar O. Chisari (Contact Author)

affiliation not provided to SSRN

No Address Available

Carlos Romero

Central University of Venezuela (UCV) ( email )

University City
Los Chaguaramos
Caracas, 1050
Venezuela

Carlos Romero

The World Bank

1818 H Street, N.W.
Washington, DC 20433
United States

Govinda R. Timilsina

World Bank - Development Research Group (DECRG) ( email )

1818 H Street NW
MSN3-311
Washington, DC 20433
United States

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