Biofuels and Economic Development: A Computable General Equilibrium Analysis for Tanzania

Energy Economics 11/2012; 34(6):1922–1930. DOI: 10.1016/j.eneco.2012.07.020

Posted: 26 Nov 2014

See all articles by Channing Arndt

Channing Arndt

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Karl Pauw

International Food Policy Research Institute (IFPRI)

James Thurlow

UNU-WIDER; International Food Policy Research Institute (IFPRI)

Date Written: November 2012

Abstract

Biofuels could offer new economic opportunities for low-income countries. We use a recursive dynamic computable general equilibrium model of Tanzania to evaluate different biofuels production options and estimate their impacts on growth and poverty. Our results indicate that maximizing the poverty-reducing effects of biofuels production in countries like Tanzania will require engaging and improving the productivity of smallholder farmers. Evidence shows that cassava-based ethanol production is more profitable than other feedstock options. Cassava also generates more “pro-poor” growth than sugarcane-based systems. However, if smallholder yields can be improved rather than expanding cultivated land, then both sugarcane and cassava out-grower schemes generate similar pro-poor outcomes. We conclude that, in so far as the public investments needed to establish a biofuels industry are consistent with other development needs, then producing biofuels will enhance economic development in countries like Tanzania.

Suggested Citation

Arndt, Channing and Pauw, Karl and Thurlow, James, Biofuels and Economic Development: A Computable General Equilibrium Analysis for Tanzania (November 2012). Energy Economics 11/2012; 34(6):1922–1930. DOI: 10.1016/j.eneco.2012.07.020, Available at SSRN: https://ssrn.com/abstract=2530550

Channing Arndt (Contact Author)

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6 B
Helsinki, FI‐00160
Finland

Karl Pauw

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

James Thurlow

UNU-WIDER ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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