Modelling the Impact of Climate Change Risk on Bio-Ethanol Supply Chains

Abstract

The availability of bio-ethanol, a promising renewable alternative to fossil fuels depends on the supply of biomass produced from agricultural resources. The study attempts a system dynamics modelling approach to explore the implications of greenhouse gas concentration trajectories associated with climate change on bio-ethanol supply chains. Eight different climate change scenarios are simulated spanning over a 40-year horizon to predict biomass yield and bio-ethanol availability, by considering first generation (corn) and second generation (switch-grass) ethanol feed-stocks. The developed model is used to assess the extent of potential disruptions resulting from global warming. Cascading effect of climate change risk is evident through decreased yield and production, and increased shortages at end customer in the bio-ethanol supply network. The results indicate that, if climate change risk is not adequately mitigated and current used source of ethanol (corn) continues to be leveraged, the bio-ethanol availability may decrease by one-fourth by the year 2060. The comparative study encourages exploring the increased use of switch-grass as a sustainable feed-stock for renewable energy. Developed insights support identifying effective climate change mitigation policies and sustainable investment decisions for the reduction in carbon emissions.

Keywords: Bio-ethanol; Climate Change; Renewable Energy; Supply Chain Risk; System Dynamics