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The Land Use Impacts of the EU Biodiesel Policy: Assessing the Direct, Indirect and Induced Effects
Author(s) -
Gohin Alexandre
Publication year - 2020
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/1477-9552.12365
Subject(s) - computable general equilibrium , partial equilibrium , economics , indirect effect , european commission , biodiesel , biodiesel production , production (economics) , commission , land use , representation (politics) , aggregate (composite) , general equilibrium theory , econometrics , land use, land use change and forestry , natural resource economics , european union , agricultural economics , microeconomics , international economics , ecology , politics , biochemistry , chemistry , materials science , finance , political science , law , composite material , biology , catalysis
This paper deals with the controversial measure of indirect land use changes of the European biodiesel policy. Two studies sponsored by the European Commission find significant, but contrasted, land use impacts for the different vegetable oils used for biodiesel production. The first study uses an aggregate computable general equilibrium model capturing direct, indirect and induced effects. The second more recent study uses a biotechnical partial equilibrium model providing a detailed representation of the indirect effects occurring through the livestock sectors. We develop an original economic emulator to understand the diverging key results of these studies and test their sensitivity. We find that the direct and indirect effects on vegetable oil and land markets explain most of the differences. We also find that indirect effects on the feed markets and the induced effects have less influence on the biodiesel results. We finally argue that the development of emulators as done here can help to understand complex policy assessments.