Title

Welfare Impacts of Alternative Biofuel and Energy Policies

Campus Units

Economics

Document Type

Article

Publication Version

Published Version

Publication Date

2011

Journal or Book Title

American Journal of Agricultural Economics

Volume

93

Issue

5

First Page or Article ID Number

1235

Last Page

1256

DOI

10.1093/ajae/aar053

Abstract

An open-economy equilibrium model is derived to investigate the effects of energy policy on the U.S. economy, with emphasis on corn-based ethanol. A second best policy of a fuel tax and ethanol subsidy is found to approximate fairly closely the welfare gains associated with the first best policy of an optimal carbon tax and tariffs on traded goods. The largest economic gains to the U.S. economy from these energy policies arise from their impact on U.S. terms of trade, particularly in the oil market. Conditional on the current fuel tax, an optimal ethanol mandate is superior to an optimal ethanol subsidy.

JEL Classification

F1, H2, Q2

Comments

This is an article from American Journal of Agricultural Economics 93 (2011): 1235, doi: 10.1093/ajae/aar053.

Rights

Works produced by employees of the U.S. Government as part of their official duties are not copyrighted within the U.S. The content of this document is not copyrighted.

Language

en

File Format

application/pdf