Economics of Biofuel Policies

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.

"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

• 1. How Biofuel Policies Ushered in the New Era of High and Volatile Grain and Oilseed Prices 2. The Economics of Biofuel Policies: The Theory of Corn-Ethanol and Ethanol-Gasoline Price Links 3. Measures of Biofuel Policy Impact on Food Commodity Prices 4. A Forensic Analysis of the Food Commodity Price Boom of 2008 5. A Critique of the Literature analyzing Biofuel Policy and the 2008 Food Commodity Price Boom 6. The Economics of Developing Country Policy Responses and Biofuel Policies 7. An Enhanced Exposition of the Corn-Ethanol-Energy Price Linkages and Implications for Time Series Analysis of Biofuel Policy Impacts 8. The Impact of Biofuel Policies on Food Commodity Price Volatility 9. The Economics of Biodiesel and the Central Role of European Union's Policies 10. The Complex Structure of the US Biofuel Mandate: A Handbook 11. The Economics of Brazil's Sugarcane-Ethanol/Sugar Complex and Policies 12. The Interaction Effects Among Biofuels, Policies, and Countries 13. The Impact ofBiofuel Policies in the Future: Some Concluding Remarks