The Downside of Domestic Substitution of Oil with Biofuels: Will Brazil Catch the Dutch Disease?

In response to oil price rises and carbon emission concerns, policies promoting increased ethanol usage in gasoline blends are being implemented by many countries, including major energy users such as USA, EU and Japan. As a result, Brazil, as the largest ethanol producer and exporter in the world, can expect growing foreign demand for ethanol exports. Also, the introduction of flex-fuel vehicles in Brazil is causing domestic sales of ethanol to increase steadily. In this paper, we investigate the regional and industrial economic consequences of rapid growth in Brazilian ethanol consumption an... Mehr ...

Verfasser: Giesecke, James A
Horridge, Mark
Scaramucci, Jose
Dokumenttyp: Monograph
Erscheinungsdatum: 2007
Verlag/Hrsg.: Centre of Policy Studies (CoPS)
Schlagwörter: 1402 Applied Economics / College of Business / Centre of Policy Studies (CoPS) / D58 / Q13 / Q42 / R11 / R49 / CGE models / energy / ethanol / Brazil
Sprache: Englisch
Permalink: https://search.fid-benelux.de/Record/base-26686105
Datenquelle: BASE; Originalkatalog
Powered By: BASE
Link(s) : https://vuir.vu.edu.au/29305/

In response to oil price rises and carbon emission concerns, policies promoting increased ethanol usage in gasoline blends are being implemented by many countries, including major energy users such as USA, EU and Japan. As a result, Brazil, as the largest ethanol producer and exporter in the world, can expect growing foreign demand for ethanol exports. Also, the introduction of flex-fuel vehicles in Brazil is causing domestic sales of ethanol to increase steadily. In this paper, we investigate the regional and industrial economic consequences of rapid growth in Brazilian ethanol consumption and exports. For this, we use a disaggregated multi-regional computable general equilibrium (CGE) model with energy industry detail. Our modelling emphasises a number of features of ethanol production in Brazil which we expect to be important in determining the adjustment of its regional economies to a substantial expansion in ethanol production. These include regional differences in ethanol and sugar production technologies, sugarcane harvesting methods and the elasticity of land supply to sugarcane production.