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Ethanol production, food and forests

Andrade de Sa, Saraly, Palmer, Charles and Engel, Stefanie (2011) Ethanol production, food and forests. Environmental and Resource Economics, 51 (1). pp. 1-21. ISSN 0924-6460

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Abstract

This paper investigates the direct and indirect impacts of ethanol production on land use, deforestation and food production. A partial equilibrium model of a national economy with two sectors and two regions, one of which includes a forest, is developed. It analyses how an exogenous increase in the ethanol price affects input allocation (land and labor) between sectors (energy crop and food). The total effect of ethanol prices on food production and deforestation is decomposed into three partial effects. First, the well-documented effect of direct land competition between rival uses arises; it increases deforestation and decreases food production. Second, an indirect displacement of food production across regions, possibly provoked by the reaction of international food prices, increases deforestation and reduces the food sector’s output. Finally, labor mobility between sectors and regions tends to decrease food production but also deforestation. The total impact of ethanol production on food production is negative while there is an ambiguous impact on deforestation.

Item Type: Article
Official URL: http://www.springer.com/economics/environmental/jo...
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use
Journal of Economic Literature Classification System: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q1 - Agriculture > Q11 - Aggregate Supply and Demand Analysis; Prices
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q24 - Land
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q42 - Alternative Energy Sources
Sets: Departments > Geography and Environment
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 07 Nov 2011 11:43
URL: http://eprints.lse.ac.uk/39263/

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