Steven Sexton, David Zilberman, Deepak Rajagopal, and Gal Hochman
University of California, Berkeley
Biofuel production has increased dramatically since 2000, impacting markets for food and fuel. This article uses a partial equilibrium model to simulate biofuel impacts. We find that US biofuel production imposes costs on food consumers but benefits gasoline consumers by reducing gas prices. Current biofuels, therefore, create a trade-off between food and fuel. The demand for agriculture to provide food and fuel to a growing world population creates an imperative for improved agricultural productivity. Biotechnology and transgenic crops can be powerful drivers of productivity growth, but it demands increased investment and reduced regulation. We argue that biotechnology is essential to reduce land-use changes associated with rising biofuel demand that not only reduce biodiversity, but also release greenhouse gases into the atmosphere.
Key words: biotechnology, climate change, ethanol, biofuel, greenhouse gas emissions, agricultural productivity, transgenic crops.