Meeting the Mandate for Biofuels: Implications for Land Use, Food, and Fuel Prices

Xiaoguang Chen, Haixiao Huang, Madhu Khanna and Hayri Önal

in The Intended and Unintended Effects of U.S. Agricultural and Biotechnology Policies

Published by University of Chicago Press

Published in print March 2012 | ISBN: 9780226988030
Published online February 2013 | e-ISBN: 9780226988061 | DOI:
Meeting the Mandate for Biofuels: Implications for Land Use, Food, and Fuel Prices

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This chapter examines the effects of the Renewable Fuel Standard (RFS) and accompanying volumetric subsidies for land use, food, and fuel production and prices in the United States. Biofuel mandates and subsidy policies have been enacted with the intention of promoting renewable alternatives to reduce dependence on gasoline. Concerns about the competition they pose for land and its implications for food prices have led to a shift in policy incentives toward second-generation biofuels from nonfood-based feedstocks. This chapter develops a framework to examine the economic viability of these feedstocks and the extent to which biofuel expansion will imply a trade-off between food and fuel production. It analyzes the differential incentives provided by alternative policies for biofuel production and the mix of biofuels and the welfare costs of biofuel policies.

Keywords: Agriculture/Economic Research Service; corn-based ethanol; biofuel; environmental policy; Renewable Fuel Standard

Chapter.  19736 words.  Illustrated.

Subjects: Economic Development and Growth

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