Integrating Partial and General Equilibrium Models to Assess Biofuels Expansion Impacts: Developing New Modules in BLUM

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 proposal main objective is to develop and improve new modules in the partial equilibrium Brazilian Land Use Model (BLUM) in order to further be integrated in the global Modular Applied General Equilibrium Tool - MAGNET (general equilibrium model). This methodological advance 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. For instance, this post doctoral research aims to improve the dairy sector and the international trade equations in BLUM. Additionally, we will simulate future biofuels expansion demand and compare the results of the different versions of the BLUM model.