Do biofuel subsidies reduce greenhouse gas emissions?
Conventional wisdom suggests that subsidising biofuel production will reduce greenhouse gas (GHG) emissions. This paper shows that in many cases, and for a wide range of parameter values, this is not true. Biofuel subsidies can generate supply-side response by fossil fuel producers that accelerates their rate of extraction, even in the case where fossil fuel extraction costs are stock dependent. Thus, policies designed to reduce GHG emissions may, perversely, hasten climate change.
- Record URL:
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Corporate Authors:
Australian National University. Crawford School of Economics and Government
Canberra, ACT -
Authors:
- Grafton, R Q
- Kompas, T
- Long, N V
- Publication Date: 2010
Language
- English
Media Info
- Pagination: 37p
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Serial:
- Issue Number: 10-01
Subject/Index Terms
- TRT Terms: Air quality management; Biomass fuels; Climate change; Economics; Environment; Policy; Subsidies; Supply
- Uncontrolled Terms: Planning and Environment
- ATRI Terms: Biofuel; Climate change; Emissions control; Environment; Policy; Subsidy; Supply; Transport economics
- Subject Areas: Economics; Environment; Policy;
Filing Info
- Accession Number: 01382246
- Record Type: Publication
- Source Agency: ARRB
- Files: ATRI
- Created Date: Aug 22 2012 1:08PM