The Economics of Biofuel Policies

The global food crises of 2008 and 2010 and the increased price volatility revolve around biofuels policies and their interaction with each other, farm policies and between countries. While a certain degree of research has been conducted on biofuel efficacy and logistics, there is currently no book on the market devoted to the economics of biofuel policies. The Economics of Biofuel Policies focuses on the role of biofuel policies in creating turmoil in the world grains and oilseed markets since 2006. This new volume is the first to put together theory and empirical evidence of how biofuel policies created a link between crop (food grains and oilseeds) and biofuel (ethanol and biodiesel) prices. This combined with biofuel policies role in affecting the link between biofuels and energy (gasoline, diesel and crude oil) prices will form the basis to show how alternative US, EU, and Brazilian biofuel policies have immense impacts on the level and volatility of food grain and oilseed prices.

“This book provides an excellent perspective of biofuel policies and their impact on commodity prices. It is well written and provides a notes section that is also a very good source of information on the ebbs and flows of biofuel policy. The list of references used in the book is a must have for individuals studying biofuel policy. We highly recommend this book to those interested in energy policy and its potential ties to agricultural markets.” (Umama Rahman, Evan Markel and Burton C. English, Australian Journal of Agricultural and Resource Economics, Vol. 61 (2), 2017)

"Confused about the reasons for recent spikes in food prices and their continued volatility? Are droughts and floods the problem? New financial speculation made possible by commodity index funds and derivatives? Perhaps bio-fuel policies, which seemed so promising in the early 2000s when cereal prices were at historic lows, but which are now thought by some to be a serious threat to food security. This book provides the answers with an innovative analytical model of food price formation and the detailed institutional and market empirics needed to clarify the cacophony of messages from a very confused and inward looking agricultural economics profession. Bio-fuel policies are indeed the problem." - Peter Timmer, Thomas D. Cabot Professor of Development Studies, Emeritus, Harvard University, USA

"De Gorter, Drabik, and Just have produced a remarkable book that identifies the key role biofuel support policies play in the dynamics of grain and oilseed prices. This time was different, they conclude, in a refreshing new look at what has roiled agricultural commodity markets in recent years. The thesis is plausible, its articulation deliberately provocative, and some of the conclusions tantalizing. This timely book is a must-read for all economists and policy makers interested in this controversial subject." - GianCarlo Moschini, Professor and Pioneer Chair, Department of Economics, Iowa State University, USA

"Biofuel policies in the new Millennium have altered the economics of agricultural commodity and energy markets. This well-written and informative book provides unique insights into the workings of the biofuels sectors of the United States, Europe and Brazil. The authors present a penetrating economic analysis essential for understanding the implications and limitations of the biofuel revolution. It is a must-read for students of the bioeconomy." - David Zilberman, Professor and Robinson Chair, Department of Agricultural and Resource Economics, University of California - Berkeley, USA

"The past decade has transformed the discussions on agriculture, public policies and food security. A key and highly controversial issue was the role that biofuels played in the spike and volatility of global food prices. This book makes a unique contribution by providing a carefully documented economic history of biofuel policies and food prices over the past decade and by developing new models and an elaborate economic analysis to understand the relationship between food and fuel which will continue to be of great importance in the years to come. It is a must read for anybody interested in agriculture, energy and food security and of great use for policy-makers, researchers, and academic classrooms." - Jo Swinnen, Professor, Faculty of Economics and Business; Director, LICOS Centre for Institutions and Economic Performance, Katholieke Universiteit Leuven, Belgium    

Harry de Gorter is Professor in the Charles H. Dyson School of Applied Economics and Management, Cornell University, USA. His research focus is on agricultural trade policy and much of his recent work has been on biofuels and agricultural trade reform and the Doha Development Agenda, especially the impact of subsidies and protection on developing countries.

Dusan Drabik is Assistant Professor of Agricultural Economics at Wageningen University, the Netherlands, and Research Associate at LICOS Centre for Institutions and Economic Performance, University of Leuven, Belgium. In his recent work, Drabik has analyzed the market and environmental effects of alternative biofuel policies in the United States, the European Union and developing countries.

David R. Just is Professor in the Charles H. Dyson School of Applied Economics and Management, Cornell University, USA, and Director of the Cornell Center for Behavioral Economics in Child Nutrition Programs. Just uses the tools of psychology and economics to examine how individuals approach various choices. His research has been published in scores of research articles, winning wide recognition both among academics and within the popular press.