Analysis of cropland switching in general equilibrium modeling: Application to biofuels
Abstract
This research examines the impact of cellulosic industries on the world economy. Detailed and quantified impacts are highly uncertain and had not previously been evaluated. This research makes an effort in evaluating the global impact of the U.S. cellulosic biofuel industries according to Renewable Fuel Standard 2 (RFS2). This dissertation provides comprehensive quantitative analyses of production, price, trade and welfare in all major regions of the world. The computable general equilibrium modeling framework of GTAP is used to evaluate the impact of cellulosic biofuels. Within the current GTAP setup, the key in providing a more accurate evaluation lies in constructing a better cropland use structure. An econometric framework was employed to test whether a two-level constant elasticity of transformation (CET) function would outperform a one-level CET function in representing the cropland allocation process for the United States. The econometric estimation confirms that the additional level is a statistical improvement over one level structure in explaining the variation in the cropland allocation pattern. The model in this dissertation further extends the two-level CET cropland allocation in the United States to three-level CET cropland allocation in all regions of the world. For all regions, the cropland allocation structures are calibrated to match their cropland allocation patterns from 2004 to 2010, the period of biofuel boom. In response to a series of biofuel shocks, the model with the region-specific land transformation projects different results from the model with the original one-level CET cropland structure. The research also applies the new cropland structure in the special version of GTAP that includes cellulosic biofuels. Three RFS2 policy scenarios are designed to address the uncertainty in the development of cellulosic industries in the United States. Simulation results vary with respect to assumptions on yield change of cropland pasture and the elasticity of land transformation between dedicated energy crops and cropland pasture.
Degree
Ph.D.
Advisors
Tyner, Purdue University.
Subject Area
Agricultural economics
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