Integrating partial and general equilibrium models to assess biofuels expasion impacts

Abstract

The use of agricultural-based biofuels and bio-chemicals has been expanding worldwide, with the expectation that they can be used as a source to avoid greenhouse gas (GHG) emissions. However, the real effectiveness of these biofuels in avoiding GHG emissions when taking into account land use changes has been called into question. Since first generation biofuels and biochemical are mostly agricultural-based, concerns on competition with food and feed production have also been raised. Policymakers have increasingly been using global economic models to study and assess agricultural, environmental, international trade and climate change policies. However, currently available models have been criticized for not capturing accurately land use change dynamics. This joint proposal aims to overcome the methodological uncertainties of economic models to the debate on measuring land use changes, especially with respect to the impacts of Brazilian biofuels expansion as a consequence of biofuels blending mandates in developed countries. For instance, we propose to develop an integrated interface to combine the global Modular Applied General Equilibrium Tool - MAGNET (general equilibrium model) with the Brazilian Land Use Model - BLUM (partial equilibrium model) with the purpose of assessing the impacts of Brazilian biofuels and bio-chemicals on land use and agricultural dynamics through a global perspective. In addition, GHG emissions will be calculated using land use results combined with life cycle analysis. Also, because MAGNET is a general equilibrium model, social and economic impacts can be derived from it. Since Brazil will be analyzed in more detail, regional income generation can also be assessed through this joint project. (AU)