Scott Kaplan

Continents divided: Understanding differences between Europe and North America in acceptance of GM crops

The differences between GM policies in the US and Europe have several causes. GM technology holds a home court advantage in the US and European chemical companies did not support its introduction. The technology did not seem to provide benefits to consumers, and the crops it applied to were not so significant in Europe. The technology was introduced during a time when the political influence of green parties in Europe was especially significant, and European trust of government capacity to enter food security issues was at its lowest.

Political Economy of Biofuels

While timber and other biomass have been the main sources of fuel for millennia, there has been an increasing emphasis on growing crops and converting feedstock to liquid fuels (Rajagopal et al. 2009) or for use in power plants. These new fuels were induced by government policies and often require a diversion of resources from agricultural to energy production. Analyzing the performance of biofuels and biofuel policies requires a political economic lens—this chapter will provide such a framework to assess biofuels.

Effect of Biofuel on Agricultural Supply and Land Use

While biofuels were introduced, in part, to reduce greenhouse gas emissions through replacing fossil fuels, comparing their impact to conventional sources has been difficult. This is largely due to the challenges of quantifying indirect land use change due to biofuels, which has proved controversial. This paper introduces a stylized, dynamic framework to analyze the evolution of land use expansion as well as deforestation over time. Our analysis suggests that land use change is a dynamic process and that relationships between variables are not regular over time and space. Technological change and effective environmental policy, of both agriculture and forests, can curtail deforestation. Outcomes of the model are illustrated with empirical data from the U.S. and Brazil. In the United States, deforestation does not lead directly to cropland expansion, as there is a transition period during which land is used as pasture or left idle. In Brazil, with four times more land in pasture or underutilized land than in cropland, there is significant potential for cropland expansion from this underutilized land.

The Sugarcane Industry and the Use of Fuel Ethanol in Brazil: History, Challenges, and Opportunities

Brazil is an international pioneer in biofuels, with more than 40 years of experience in the production and use of sugarcane ethanol. This paper describes institutional factors that contributed to the development of the biofuel industry, including the military regime and state-owned Petrobras in the 1970s and 1980s, the post-deregulation period in the 1990s, and changes in the 2000s, including new institutions targeting feedstock pricing arrangements and the growth in demand for flex-fuel cars, which allowed for market-based incentives. State intervention allowed the industry to overcome barriers of infrastructure, a transportation network, development of ethanol-powered vehicles, and output price stability and credit support. The paper concludes with key lessons from Brazilian ethanol production. While Brazil initially supported ethanol production in an effort to replace petroleum, it is now incentivizing expansion of a consumer market to address environmental and climate problems. Government support has allowed for efficient allocation of byproducts and positive impacts on the labor market, and agricultural sector in general. Still improvements in stability and predictability of the institutional environment are important for future growth. The lessons from Brazil provide insight into the challenges of biofuels in other countries attempting to replace fossil fuels with renewable resources.

Dynamic Management of Fossil Fuel, Biofuel, and Solar Energy

Cheap energy has been key to the modern economy. The use of electricity and the internal combustion engine have been crucial for current patterns of civilization, and reduction in availability or increases in the cost of energy have serious consequences for current activities of society. Concerns about climate change, depletion of fossil fuel, and exchange rates are causing societies to transition from fossil to renewable fuel. The transition is challenging both in terms of modeling and policy design. There is an emerging portfolio of alternative technologies, but the extent and order in which they will be introduced is uncertain and presents a major challenge.