The Perverse Effects of Biofuel Public-Sector Policies

Posted: 11 Oct 2013

See all articles by Harry de Gorter

Harry de Gorter

Cornell University - School of Applied Economics and Management

Dusan Drabik

Cornell University - Charles H. Dyson School of Applied Economics and Management

David R. Just

Cornell University - Dyson School of Applied Economics and Management

Date Written: June 2013

Abstract

Biofuel policies are a subset of policies designed to achieve energy security, an improved environment, enhanced agricultural incomes, technological change, and overall economic benefits, with increased domestic energy production creating green jobs and foreign exchange savings. In assessing this broad spectrum of proclaimed policy goals with the outcome of biofuel mandates, subsidies, import barriers, binary sustainability standards, and indirect land use measures, we identify many perverse and contradictory effects. Most importantly, we show how biofuel policies established the crop-energy price link and hence the food-fuel trade-off, the contradictory effects of combining mandates with different subsidies, the various surprising welfare economic effects, and the various inconsistencies associated with binary sustainability standards and carbon leakages. We conclude with examples of how biofuel policies have generated paradoxical effects in many other different dimensions.

Suggested Citation

de Gorter, Harry and Drabik, Dusan and Just, David R., The Perverse Effects of Biofuel Public-Sector Policies (June 2013). Annual Review of Resource Economics, Vol. 5, Issue 1, pp. 463-483, 2013. Available at SSRN: https://ssrn.com/abstract=2339092 or http://dx.doi.org/10.1146/annurev-resource-091912-151933

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)

Dusan Drabik

Cornell University - Charles H. Dyson School of Applied Economics and Management ( email )

331 Warren Hall
Ithaca, NY 14853
United States

HOME PAGE: http://https://sites.google.com/site/dusandrabik83/Home

David R. Just

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

Ithaca, NY
United States
607-255-2086 (Phone)
607-255-9984 (Fax)

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