Under what conditions would ethanol be in society s best interest l.jpg
This presentation is the property of its rightful owner.
Sponsored Links
1 / 21

Under What Conditions Would Ethanol be in Society’s Best Interest? PowerPoint PPT Presentation


  • 68 Views
  • Uploaded on
  • Presentation posted in: General

Under What Conditions Would Ethanol be in Society’s Best Interest?. Charles B. Moss, Troy G. Schmitz, and Andrew Schmitz. Welfare Effects with Government Programs. Welfare Impacts of a Shift in Corn Demand. Added Effects of Ethanol Measured in the Fuel Market.

Download Presentation

Under What Conditions Would Ethanol be in Society’s Best Interest?

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Under What Conditions Would Ethanol be in Society’s Best Interest?

Charles B. Moss, Troy G. Schmitz, and Andrew Schmitz


Welfare Effects with Government Programs


Welfare Impacts of a Shift in Corn Demand


Added Effects of Ethanol Measured in the Fuel Market


Summary of Welfare Costs and Benefits: U.S. Ethanol Production


Comparisons


Current Policy Scenario


Simplified CGE Original Equilibrium


Subsidizing Ethanol Production


Equilibrium Changes

  • Original Equilibrium

  • Equilibrium After Ethanol Subsidy


  • Effect of Subsidy on Price/Budget Line


A Simplified CGE of Subsidizing Ethanol

  • Simplify the economy to four outputs

    • Agriculture/Food

    • Manufactured Goods

    • Energy

    • Ethanol

  • Ethanol will be assumed to be an imperfect substitute for energy


  • Inputs

    • Capital

    • Labor

    • Energy (primary energy)

    • Materials

    • Land


General Equilibrium

Capital

Labor

Energy

Materials

Land

Agriculture

Energy

Manufacture

Ethanol

Agriculture

Manufactured

Energy


Production of Ethanol (Biofuels)

Capital

Labor

Energy

Materials

Ag. Output

Ethanol (Biofuels)

Energy

Ag. Biproduct


CES Production and Utility Functions

  • Utility and Production Functions

  • Input and Output Demands


Excess Demand Relationships

  • Excess Demand Functions

    • First determine the demand for outputs

    • Compute excess demands for inputs


Solution

  • Objective Function

    • Income closure

    • Zero profit restriction

    • Price normalization


Input/Output Relationships

  • Energy Demand

  • Agricultural Demand

  • Manufactured Goods


Effect in Output Market


Change in Input Prices


  • Login