We show how leakage differs, depending on the biofuel policy and market conditions. Carbon leakage is shown to have two components: a market leakage effect and an emissions savings effect. We also distinguish domestic and international leakage. International leakage is always positive, but...

This revised version replaces a previous one titled: "Optimal Ethanol Policies for the U.S. in a General Equilibrium Framework"

We develop an analytical framework to assess the market effects of alternative biofuel policies (including subsidies to feedstocks). U.S. corn-ethanol policies are used as an example to study the effects on corn prices. We determine the ‘no policy’ ethanol price; analyze the implications for...

This is the first paper to analyze the impact of biofuels on the price transmission along the food chain. We analyze the U.S. corn sector and its vertical links with food and ethanol (energy) markets. We find that biofuels affect the price transmission elasticity in the food chain compared to a...

This paper analyzes carbon leakage due to reduced emissions from deforestation (RED). We find that leakage with RED is good because the policy induces afforestation that contributes to a further carbon sequestration. By ignoring the domestic component of carbon leakage, the literature can either...

We show carbon leakage depends on the type of biofuel policy (tax credit versus mandate), the domestic and foreign gasoline supply and fuel demand elasticities, and on consumption and production shares of world oil markets for the country introducing the biofuel policy. The components of carbon...

Based on their theoretical predictions, Kliauga, de Gorter, and Just (2008) and de Gorter, Drabik, and Just (2010) argue that the United States and the European Union establish the world ethanol and biodiesel prices, respectively. We test these theories using cointegration analysis and the...

A conceptual framework is advanced that determines world biodiesel prices, the policy parameters in the country establishing the price, and the binding mandate or tax exemption. The effect of a tax credit differs with international trade compared to traditional closed economy analysis. The U.S....

In Western Europe, the USA and other developed countries agriculture is dominated by small family farms. In Central and Eastern European countries (CEECs) a dual structure of farms exists. There are large corporate farms (CF) and small family farms (FF) in CEECs. This article shows that both CF...

Leakage in the fuel market differs, depending on whether ethanol production is determined by a tax credit or consumption mandate. Two components of market leakage are distinguished: domestic and international. Leakage with both a tax credit and a consumption mandate depends on market...