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Food vs. Fuel: The Effect of Biofuel Policies
Author(s) -
Chen Xiaoguang,
Khanna Madhu
Publication year - 2013
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aas039
Subject(s) - library science , citation , session (web analytics) , sociology , business , computer science , advertising
This paper analyzes the effects of the Renewable Fuel Standard (RFS) and the existing accompanying volumetric ethanol excise tax credit (VEETC) and import tariff on food prices in the US relative to a counter-factual business-as-usual (BAU) scenario. It shows that policies like the VEETC and import tariff that accompany the RFS can delay the transition to advanced bio-fuels and exacerbate the negative impact of the RFS on food crop prices. The extent to which this will be the case will depend on technological developments in the next decade. If the costs of sugarcane ethanol and cellulosic ethanol are relatively high making them less competitive with corn ethanol, then these tax credits and tariff will have much smaller impacts on the mix of bio-fuels and on food prices than otherwise; advanced bio-fuels would then at best be able to meet the minimum mandated levels.