Bioethanol lecture
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Transcript of Bioethanol lecture
Energy: BioethanolLECTURE ON THE ECONOMICS OF ENERGY
Why does Energy matter?National Security Issues
Continued decline in energy reserves
What actions have been taken?Incentive building for alternative fuels
Creation of alternative fuels
Model Redesign
What fuels are currently available?Biodiesel
Ethanol
Electricity
Hydrogen
Natural Gas
Propane
Costs of Biodiesel
Costs of Ethanol
Costs of Electric Cars:
Costs of Hydrogen
BioethanolWhat is Bioethanol?
Current Ethanol RegulationClean Air Act
1977 Amendments1990 Amendments
Fuel Additive and Fuel RegistrationE15 Registration
E10 Regulation
E15 Regulation
Offsetting CostsNet Gain in Consumer Welfare (Assumed)
Incentives (Federal Incentives)
Additional Costs: Agricultural Issue Interconnectedness of Food Market and Fuel Market
Raises costs of cropsCommonly seen as a demand issue
My QuestionQuestion: Is bioethanol a viable and good solution?
Viable: Sustainable
Good: Increases net social welfare
Terminology:
Hectare
Land Grabs
Supply Side Approach (My Argument)
Bioethanol is another industry and has different costs.
The supply curve is also the marginal cost curve of an industryIncentives for Land Grabs by ethanol
corporations
Land Grabs reduce supply of land for agricultural purposes
S
D
S’
Demand Side Approach (Consensus)
Bioethanol increases demands for certain crops
Agricultural food suppliers also supply fuel industries with crops
No division in suppliers between markets, entirely a demand issue.
S
D D’
What does this result in?Higher Food Prices
Lower Gas Prices (My Argument)
Evidence?Food Crisis of 2008
GFRP
Is this worth it?Do the social costs of pollution offset the resulting costs of bioethanol?
What are the alternatives?
Questions?