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

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

Chapter:
(p.223) 7 Meeting the Mandate for Biofuels: Implications for Land Use, Food, and Fuel Prices
Source:
The Intended and Unintended Effects of U.S. Agricultural and Biotechnology Policies
Author(s):
Xiaoguang ChenHaixiao HuangMadhu KhannaHayri Önal
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226988061.003.0008

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

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