World Oil Price and Biofuels : A General Equilibrium Analysis

The price of oil could play a significant role in influencing the expansion of biofuels. However, this issue has not been fully investigated yet in the literature. Using a global computable general equilibrium model, this study analyzes the impact...

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Main Authors:	Timilsina, Govinda R., Mevel, Simon, Shrestha, Ashish
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	AGRICULTURAL COMMODITIES AGRICULTURAL ECONOMICS AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURE ALLOCATION ALTERNATIVE SCENARIOS AVAILABILITY BALANCE BILATERAL TRADE BIODIESEL BIOFUEL BIOFUEL PRODUCTION BIOFUELS BIOFUELS PRODUCTION CAPITAL STRUCTURE CARBON SEQUESTRATION CLEAN DEVELOPMENT CLIMATE CLIMATE CHANGE CLIMATE CHANGE POLICY CLIMATE POLICY COAL COMMERCIAL ENERGY CONSUMER PRICE CONSUMER PRICE INDEX CORN COST OF CARBON CROP DEFORESTATION DEMAND FOR ENERGY DEMAND FOR FOOD DEVELOPMENT ECONOMICS DIESEL DYNAMIC COMPUTABLE GENERAL EQUILIBRIUM DYNAMIC MODEL ECONOMIC ANALYSIS ECONOMIC SYSTEMS ECONOMY-WIDE IMPACTS EFFICIENCY IMPROVEMENT ELECTRIC ENERGY ELECTRICITY EMISSION EMISSIONS ENERGY CAPITAL ENERGY DEMAND ENERGY ECONOMICS ENERGY ECONOMISTS ENERGY EFFICIENCY ENERGY EFFICIENCY IMPROVEMENT ENERGY SECTOR ENERGY SECURITY ENERGY USE ENERGY-INTENSIVE MANUFACTURING ENVIRONMENTAL IMPACTS ENVIRONMENTAL MANAGEMENT ETHANOL EXPENDITURE EXPORT MARKETS FEEDSTOCK FEEDSTOCKS FINANCIAL SUPPORT FOOD CROPS FOOD SUPPLY FOSSIL FOSSIL FUEL FOSSIL FUEL COUNTERPARTS FOSSIL FUELS FREE TRADE FRUIT FRUITS FUEL CONSUMPTION FUEL MIX FUEL OILS FUEL SUPPLY GAS GASOLINE GENERAL EQUILIBRIUM MODEL GHG GLOBAL FOOD SUPPLY GRAINS GROSS OUTPUT HOUSEHOLD CONSUMPTION HOUSEHOLD EXPENDITURES HOUSEHOLD INCOME HOUSEHOLD SECTOR IMPORT PRICES IMPORTS INCOME INTERMEDIATE GOODS INTERNATIONAL TRADE LAND USE LAND USE CHANGE LAND-USE CHANGE LIQUID FUEL MARKET CLEARING PRICE MARKET EQUILIBRIUM MARKET PRICE MONETARY VALUE OIL OIL PRICE OIL PRICES OIL SEEDS OILS PER CAPITA CONSUMPTION POLICY MAKERS POWER PRICE CHANGES PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE LEVEL PRICE OF OIL PROCESSED FOODS PRODUCER PRICE SALES SENSITIVITY ANALYSES SOYBEANS STEEL SUBSTITUTION SUGAR SUGAR BEET SUGAR CANE SUGAR CROPS SUGARCANE SUPPLIERS SUPPLY SIDE TOTAL DEMAND TRANSPORTATION FUEL VEGETABLES VEHICLES WHEAT
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110602161941 http://hdl.handle.net/10986/3436

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spelling	okr-10986-34362021-04-23T14:02:09Z World Oil Price and Biofuels : A General Equilibrium Analysis Timilsina, Govinda R. Mevel, Simon Shrestha, Ashish AGRICULTURAL COMMODITIES AGRICULTURAL ECONOMICS AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURE ALLOCATION ALTERNATIVE SCENARIOS AVAILABILITY BALANCE BILATERAL TRADE BIODIESEL BIOFUEL BIOFUEL PRODUCTION BIOFUELS BIOFUELS PRODUCTION CAPITAL STRUCTURE CARBON SEQUESTRATION CLEAN DEVELOPMENT CLIMATE CLIMATE CHANGE CLIMATE CHANGE POLICY CLIMATE POLICY COAL COMMERCIAL ENERGY CONSUMER PRICE CONSUMER PRICE INDEX CORN COST OF CARBON CROP DEFORESTATION DEMAND FOR ENERGY DEMAND FOR FOOD DEVELOPMENT ECONOMICS DIESEL DYNAMIC COMPUTABLE GENERAL EQUILIBRIUM DYNAMIC MODEL ECONOMIC ANALYSIS ECONOMIC SYSTEMS ECONOMY-WIDE IMPACTS EFFICIENCY IMPROVEMENT ELECTRIC ENERGY ELECTRICITY EMISSION EMISSIONS ENERGY CAPITAL ENERGY DEMAND ENERGY ECONOMICS ENERGY ECONOMISTS ENERGY EFFICIENCY ENERGY EFFICIENCY IMPROVEMENT ENERGY SECTOR ENERGY SECURITY ENERGY USE ENERGY-INTENSIVE MANUFACTURING ENVIRONMENTAL IMPACTS ENVIRONMENTAL MANAGEMENT ETHANOL EXPENDITURE EXPORT MARKETS FEEDSTOCK FEEDSTOCKS FINANCIAL SUPPORT FOOD CROPS FOOD SUPPLY FOSSIL FOSSIL FUEL FOSSIL FUEL COUNTERPARTS FOSSIL FUELS FREE TRADE FRUIT FRUITS FUEL CONSUMPTION FUEL MIX FUEL OILS FUEL SUPPLY GAS GASOLINE GENERAL EQUILIBRIUM MODEL GHG GLOBAL FOOD SUPPLY GRAINS GROSS OUTPUT HOUSEHOLD CONSUMPTION HOUSEHOLD EXPENDITURES HOUSEHOLD INCOME HOUSEHOLD SECTOR IMPORT PRICES IMPORTS INCOME INTERMEDIATE GOODS INTERNATIONAL TRADE LAND USE LAND USE CHANGE LAND-USE CHANGE LIQUID FUEL MARKET CLEARING PRICE MARKET EQUILIBRIUM MARKET PRICE MONETARY VALUE OIL OIL PRICE OIL PRICES OIL SEEDS OILS PER CAPITA CONSUMPTION POLICY MAKERS POWER PRICE CHANGES PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE LEVEL PRICE OF OIL PROCESSED FOODS PRODUCER PRICE SALES SENSITIVITY ANALYSES SOYBEANS STEEL SUBSTITUTION SUGAR SUGAR BEET SUGAR CANE SUGAR CROPS SUGARCANE SUPPLIERS SUPPLY SIDE TOTAL DEMAND TRANSPORTATION FUEL VEGETABLES VEHICLES WHEAT The price of oil could play a significant role in influencing the expansion of biofuels. However, this issue has not been fully investigated yet in the literature. Using a global computable general equilibrium model, this study analyzes the impact of oil price on biofuel expansion, and subsequently, on food supply. The study shows that a 65 percent increase in oil price in 2020 from the 2009 level would increase the global biofuel penetration to 5.4 percent in 2020 from 2.4 percent in 2009. A doubling of oil price in 2020 from its baseline level, or a 230 percent increase from the 2009 level, would increase the global biofuel penetration in 2020 to 12.6 percent. The penetration of biofuels is highly sensitive to the substitution possibility between biofuels and their fossil fuel counterparts. The study also shows that aggregate agricultural output drops due to an oil price increase, but the drop is small in major biofuel producing countries as the expansion of biofuels would partially offset the negative impacts of the oil price increase on agricultural outputs. An increase in oil price would reduce global food supply through direct impacts as well as through diversion of food commodities and cropland toward the production of biofuels. 2012-03-19T18:02:26Z 2012-03-19T18:02:26Z 2011-06-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110602161941 http://hdl.handle.net/10986/3436 English Paper is funded by the Knowledge for Change Program (KCP),Policy Research working paper ; no. WPS 5673 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AGRICULTURAL COMMODITIES AGRICULTURAL ECONOMICS AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURE ALLOCATION ALTERNATIVE SCENARIOS AVAILABILITY BALANCE BILATERAL TRADE BIODIESEL BIOFUEL BIOFUEL PRODUCTION BIOFUELS BIOFUELS PRODUCTION CAPITAL STRUCTURE CARBON SEQUESTRATION CLEAN DEVELOPMENT CLIMATE CLIMATE CHANGE CLIMATE CHANGE POLICY CLIMATE POLICY COAL COMMERCIAL ENERGY CONSUMER PRICE CONSUMER PRICE INDEX CORN COST OF CARBON CROP DEFORESTATION DEMAND FOR ENERGY DEMAND FOR FOOD DEVELOPMENT ECONOMICS DIESEL DYNAMIC COMPUTABLE GENERAL EQUILIBRIUM DYNAMIC MODEL ECONOMIC ANALYSIS ECONOMIC SYSTEMS ECONOMY-WIDE IMPACTS EFFICIENCY IMPROVEMENT ELECTRIC ENERGY ELECTRICITY EMISSION EMISSIONS ENERGY CAPITAL ENERGY DEMAND ENERGY ECONOMICS ENERGY ECONOMISTS ENERGY EFFICIENCY ENERGY EFFICIENCY IMPROVEMENT ENERGY SECTOR ENERGY SECURITY ENERGY USE ENERGY-INTENSIVE MANUFACTURING ENVIRONMENTAL IMPACTS ENVIRONMENTAL MANAGEMENT ETHANOL EXPENDITURE EXPORT MARKETS FEEDSTOCK FEEDSTOCKS FINANCIAL SUPPORT FOOD CROPS FOOD SUPPLY FOSSIL FOSSIL FUEL FOSSIL FUEL COUNTERPARTS FOSSIL FUELS FREE TRADE FRUIT FRUITS FUEL CONSUMPTION FUEL MIX FUEL OILS FUEL SUPPLY GAS GASOLINE GENERAL EQUILIBRIUM MODEL GHG GLOBAL FOOD SUPPLY GRAINS GROSS OUTPUT HOUSEHOLD CONSUMPTION HOUSEHOLD EXPENDITURES HOUSEHOLD INCOME HOUSEHOLD SECTOR IMPORT PRICES IMPORTS INCOME INTERMEDIATE GOODS INTERNATIONAL TRADE LAND USE LAND USE CHANGE LAND-USE CHANGE LIQUID FUEL MARKET CLEARING PRICE MARKET EQUILIBRIUM MARKET PRICE MONETARY VALUE OIL OIL PRICE OIL PRICES OIL SEEDS OILS PER CAPITA CONSUMPTION POLICY MAKERS POWER PRICE CHANGES PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE LEVEL PRICE OF OIL PROCESSED FOODS PRODUCER PRICE SALES SENSITIVITY ANALYSES SOYBEANS STEEL SUBSTITUTION SUGAR SUGAR BEET SUGAR CANE SUGAR CROPS SUGARCANE SUPPLIERS SUPPLY SIDE TOTAL DEMAND TRANSPORTATION FUEL VEGETABLES VEHICLES WHEAT
spellingShingle	AGRICULTURAL COMMODITIES AGRICULTURAL ECONOMICS AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURE ALLOCATION ALTERNATIVE SCENARIOS AVAILABILITY BALANCE BILATERAL TRADE BIODIESEL BIOFUEL BIOFUEL PRODUCTION BIOFUELS BIOFUELS PRODUCTION CAPITAL STRUCTURE CARBON SEQUESTRATION CLEAN DEVELOPMENT CLIMATE CLIMATE CHANGE CLIMATE CHANGE POLICY CLIMATE POLICY COAL COMMERCIAL ENERGY CONSUMER PRICE CONSUMER PRICE INDEX CORN COST OF CARBON CROP DEFORESTATION DEMAND FOR ENERGY DEMAND FOR FOOD DEVELOPMENT ECONOMICS DIESEL DYNAMIC COMPUTABLE GENERAL EQUILIBRIUM DYNAMIC MODEL ECONOMIC ANALYSIS ECONOMIC SYSTEMS ECONOMY-WIDE IMPACTS EFFICIENCY IMPROVEMENT ELECTRIC ENERGY ELECTRICITY EMISSION EMISSIONS ENERGY CAPITAL ENERGY DEMAND ENERGY ECONOMICS ENERGY ECONOMISTS ENERGY EFFICIENCY ENERGY EFFICIENCY IMPROVEMENT ENERGY SECTOR ENERGY SECURITY ENERGY USE ENERGY-INTENSIVE MANUFACTURING ENVIRONMENTAL IMPACTS ENVIRONMENTAL MANAGEMENT ETHANOL EXPENDITURE EXPORT MARKETS FEEDSTOCK FEEDSTOCKS FINANCIAL SUPPORT FOOD CROPS FOOD SUPPLY FOSSIL FOSSIL FUEL FOSSIL FUEL COUNTERPARTS FOSSIL FUELS FREE TRADE FRUIT FRUITS FUEL CONSUMPTION FUEL MIX FUEL OILS FUEL SUPPLY GAS GASOLINE GENERAL EQUILIBRIUM MODEL GHG GLOBAL FOOD SUPPLY GRAINS GROSS OUTPUT HOUSEHOLD CONSUMPTION HOUSEHOLD EXPENDITURES HOUSEHOLD INCOME HOUSEHOLD SECTOR IMPORT PRICES IMPORTS INCOME INTERMEDIATE GOODS INTERNATIONAL TRADE LAND USE LAND USE CHANGE LAND-USE CHANGE LIQUID FUEL MARKET CLEARING PRICE MARKET EQUILIBRIUM MARKET PRICE MONETARY VALUE OIL OIL PRICE OIL PRICES OIL SEEDS OILS PER CAPITA CONSUMPTION POLICY MAKERS POWER PRICE CHANGES PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE LEVEL PRICE OF OIL PROCESSED FOODS PRODUCER PRICE SALES SENSITIVITY ANALYSES SOYBEANS STEEL SUBSTITUTION SUGAR SUGAR BEET SUGAR CANE SUGAR CROPS SUGARCANE SUPPLIERS SUPPLY SIDE TOTAL DEMAND TRANSPORTATION FUEL VEGETABLES VEHICLES WHEAT Timilsina, Govinda R. Mevel, Simon Shrestha, Ashish World Oil Price and Biofuels : A General Equilibrium Analysis
geographic_facet	The World Region The World Region
relation	Paper is funded by the Knowledge for Change Program (KCP),Policy Research working paper ; no. WPS 5673
description	The price of oil could play a significant role in influencing the expansion of biofuels. However, this issue has not been fully investigated yet in the literature. Using a global computable general equilibrium model, this study analyzes the impact of oil price on biofuel expansion, and subsequently, on food supply. The study shows that a 65 percent increase in oil price in 2020 from the 2009 level would increase the global biofuel penetration to 5.4 percent in 2020 from 2.4 percent in 2009. A doubling of oil price in 2020 from its baseline level, or a 230 percent increase from the 2009 level, would increase the global biofuel penetration in 2020 to 12.6 percent. The penetration of biofuels is highly sensitive to the substitution possibility between biofuels and their fossil fuel counterparts. The study also shows that aggregate agricultural output drops due to an oil price increase, but the drop is small in major biofuel producing countries as the expansion of biofuels would partially offset the negative impacts of the oil price increase on agricultural outputs. An increase in oil price would reduce global food supply through direct impacts as well as through diversion of food commodities and cropland toward the production of biofuels.
format	Publications & Research :: Policy Research Working Paper
author	Timilsina, Govinda R. Mevel, Simon Shrestha, Ashish
author_facet	Timilsina, Govinda R. Mevel, Simon Shrestha, Ashish
author_sort	Timilsina, Govinda R.
title	World Oil Price and Biofuels : A General Equilibrium Analysis
title_short	World Oil Price and Biofuels : A General Equilibrium Analysis
title_full	World Oil Price and Biofuels : A General Equilibrium Analysis
title_fullStr	World Oil Price and Biofuels : A General Equilibrium Analysis
title_full_unstemmed	World Oil Price and Biofuels : A General Equilibrium Analysis
title_sort	world oil price and biofuels : a general equilibrium analysis
publishDate	2012
url	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110602161941 http://hdl.handle.net/10986/3436
_version_	1764386995530891264

World Oil Price and Biofuels : A General Equilibrium Analysis

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