Stelios Rozakis

Micro-economic modelling of biofuel system in France to determine tax exemption policy under uncertainty

Abstract Liquid biofuel support program launched in 1993 in France is implemented through tax exemptions to biofuels produced by agro-industrial chains. Activity levels are fixed by decree and allocated by the government to the different chains. Based on earmarked budget increase voted in the parliament, total quantity of biofuels will be increased by 50% in the horizon 2002–2003. A micro-economic biofuel activity model containing a detailed agricultural sector component, that is represented by 700 farms, is used to estimate costs and surpluses generated by the activity at the national level as well as tax exemption levels. Furthermore, Monte Carlo simulation has been used to search for efficient tax exemptions policies in an uncertain environment, where biofuel profitability is significantly affected by petroleum price and soja cake prices. Results suggest that, for the most efficient units both at the industry level (large size biomass conversion units) and at the agricultural sector level (most productive farms), unitary tax exemptions could be decreased by 10–20% for both biofuels, ethyl ether and methyl ester, with no risk for the viability of any existing chain.

Energy crop supply in France: a min-max regret approach

This paper attempts to estimate energy crop supply using a linear programming (LP) model comprising hundreds of representative farms of the arable cropping sector in France. In order to enhance the predictive ability of such a model and to provide an analytical tool useful to policy makers, interval linear programming is used to formalize bounded rationality conditions. In the presence of uncertainty related to yields and prices, it is assumed that the farmer may adopt a min-max regret (MMR) criterion as an alternative to the classic profit maximization criterion. Recent advances in operational research are exploited, permitting an efficient implementation of the min-max criterion within an LP model. Model validation based on observed activity levels suggests that about 40% of the farms adopt the MMR criterion. Energy crop supply curves generated by the MMR model prove to be upward-sloped, like classic LP supply curves.

Evaluation of an integrated renewable energy system for electricity generation in rural areas

This study examines the combination of renewable energy sources for electricity generation at local level, and in particular the case of an isolated area of South Crete, the Frangocastello area, with the help of F-Cast, a computerized model that has been developed for the simulation of the operation of an integrated system. The energy supply side includes three renewable energy sources, namely wind, micro-hydraulic and biomass, and conventional high-cost electricity supplied by the National Grid. The model is the economic counterpart of an electronic control system that dispatches electricity on an hourly basis. Wind energy introduces uncertainty to the system. Relations among variables are based on three states of the world depending upon the hourly speed of the wind. Biomass is a balancing factor in the supply-demand interaction, as the production of biomass is itself at the same time consuming electricity, as an input. Conclusions are drawn on (a) the optimal combination of renewable energy sources to achieve economic viability of the system (b) effects on agricultural income and local development, and (c) evaluation of renewable energy policies.

Bio-fuel production system in France: an Economic Analysis☆

1. IntroductionLiquid bio-fuelproductiontake-o,duringthelastdecade, has placed Europe third behind Brasil andUS with 6% of the world volume. Biofuel produc-tionhasreachedasignicantlevelinFrance,wheremorethanhalfoftotalEuropeanproductionofethanolandmethylestersisproduced.Thisdevelopmentisduetoasupportprogram,thathasbeenimplementedsince 1993, including tax exemptions of 0:35 l

Calibration of agricultural risk programming models

Positive Mathematical Programming (PMP) is one of the most commonly used methods for calibrating activity programming models. In this article we consider PMP as a calibration method for risk programming models with a mean-variance (E-V) specification. We argue that the restrictive theoretical assumptions employed by typical linear E-V models limit their applicability in analyzing the effects of decoupled payments on agricultural production decisions. Furthermore, the requirement for eliciting a risk aversion coefficient renders such models incompatible with the PMP method. For this reason we propose a nonlinear E-V specification and develop a PMP-based procedure for its calibration which does not aim at introducing (further) nonlinearities in the objective function, but at recovering the “true” distribution of wealth that will allow the final model to reproduce base year observations. We also examine how our approach relates to the recent PMP developments on calibration against elasticity priors and we show how such priors can be used for the calibration of the nonlinear E-V model.

Research funding and academic output: evidence from the Agricultural University of Athens

This paper uses detailed data on funding information and research output from the Agricultural University of Athens to examine how each type of funding source is related to the quantity and quality of academic research output. Of special interest are private, Greek government and European Union sources of funding. We find that after controlling for unobserved heterogeneity from each research laboratory, all types of research funding are similarly related to both the count of publications and citations. Further, we find that research laboratories that have filed for at least one patent application produce more publications and citations to their work, indicating that laboratories that are close to industry are also engaged actively in research.

Extensions of the PROMETHEE Method to Deal with Segmentation Constraints: Application in a Students' Selection Problem

The aim of the present paper is to propose a novel version of the well known multicriteria method PROMETHEE that deals with segmentation constraints and is also suitable for group decision making. The motivation for the development of the method was a real case study concerning the selection of students for a postgraduate program. The proposed method, named PROMETHEE V2, is based on the principles of PROMETHEE V but uses the results of PROMETHEE I (instead of PROMETHEE II) and exploits the information provided by the leaving and entering flows in order to formulate a bi-objective Integer Programming problem. The solution of the latter produces the Pareto optimal solutions which are usually more than one. Due to its structure, the whole decision process is especially suitable for group decision making.

Power generation expansion planning in an autonomous island system using multi-objective programming: the case of Milos Island

This paper presents the application of multiple objective linear programming for power generation expansion planning on Milos island. The model considers those economic and environmental objectives which typically conflict (cost minimization vs. CO2 emission reduction maximization) subject to a number of constraints. Due to uncertainties in future power demand, the latter is handled as a fuzzy parameter. Fuzziness is dealt with by the addition of a third objective function, the maximization of the degree of demand satisfaction. The MOLP model developed is solved in two ways. First, the use of the augmented ε-constraint method which produces the trade offs between cost and CO2 for different values of the degree of demand satisfaction, and second the reference point framework, a generation and an interactive method, respectively. In the second approach decision makers set their aspiration levels concerning the different criteria, converging after a number of iterations in a compromise solution, whereas in the augmented ε-constraint generation method the decision makers have to choose their preferred solution between all the efficient points depicted in the trade-offs. A comparative analysis of the above methods concludes the paper, highlighting advantages and shortcomings.

On the Scarcity Value of Irrigation Water: Juxtaposing Two Market Estimating Approaches

The aim of this paper is to compare the supply-side and demand-side approaches for assessing the scarcity rents of irrigation water. The results obtained from the case study confirm the expectation that the demand-side rationale provides the lower bound estimate of water scarcity rents. Specifically, a hypothetical elimination of water scarcity brings extra benefits to the local farmers, but these benefits cannot compensate the costs of the backstop technology which provide such extra water. Therefore, the lost opportunities, in terms of income forgone due to water scarcity, cannot legitimize supply-side approaches alone. A “soft” sensitivity analysis was included to examine the robustness of such a cost-effective property, while the policy implications of the results are also examined.

Determining Efficient Bio-Fuel Tax Exemption Policy in France for Greenhouse Gas Emission Abatement

This chapter presents a micro-economic modeling framework for decisionmaking on tax exemptions and bio-fuel production levels allocated to the French bio-fuel industry. The agricultural sector is represented by about 700 arable cropping farms upon which energy crops can be cultivated. Processes undertaken where biomass is transformed into bio-fuel include ester and ethanol chains. Agriculture and industry data and technical performance parameters are projected for the year 2002. The government acts as a leader, since bio-fuel chain viability depends on subsidies. Budgetary, environmental and social concerns will affect policy decisions, whereas farmers and the industry are assumed to act rationally. A multi-criteria optimisation module is used to assist in decision-making when conflicting objectives are involved. Cost-effective tax credit levels and bio-industry configurations have been determined. Trade-offs are estimated for different targets of public expenditure and emission abatement. The French bio-fuel program was launched in 1993 with the decree of a tax exemption for bio-fuels, as a result of fuel supply uncertainty and environmental concerns. Set aside land obligations by the revised Common Agricultural Policy of 1992, that aimed at controlling cereal overproduction, created a favourable environment for growing non-food crops and has been the decisive factor that incited farmers to produce energy crops in sufficient quantities to supply bio-fuel industry. As a matter of fact, the part of energy crops cultivated in land set aside increased to reach 30% in 1999 (Figure 15.1).