Measuring indirect land use change with biofuels: Implications for policy

Madhu Khanna, Christine L. Crago

Research output: Contribution to journalReview article

Abstract

The indirect land use change (ILUC) effect of biofuels has called into question the greenhouse gas (GHG) mitigation benefit of biofuels compared with that of fossil fuels. This article reviews the various economic modeling approaches being used to assess the ILUC effect and discusses the key factors that influence estimates of its magnitude. We find that there is considerable variability in the magnitude of ILUC associated with a biofuel pathway across studies and within a study, depending on underlying model parameters. These estimates are sensitive to the scale of biofuel production, the mix of policies and biofuels considered, variations in the parametric assumptions that govern price transmission through international trade, and the ease of changes in land use at the intensive and extensive margins. We discuss the challenges in implementing policies to address ILUC.

Original languageEnglish (US)
Pages (from-to)161-184
Number of pages24
JournalAnnual Review of Resource Economics
Volume4
DOIs
StatePublished - Aug 1 2012

Keywords

  • GHG emissions
  • economic models
  • general equilibrium models
  • partial equilibrium models

ASJC Scopus subject areas

  • Economics and Econometrics

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