Renewable ressources in partial and general equilibrium models

Policy makers around the world have put policies in place that promote the use of biomass for energy purposes. The Thünen Institute analysis the impact of these policies.

Background and Objective

Policies and increasing prices for fossil fuels have triggered the energy and chemical sectors´demand for agricultural commodities. Production, trade, demand and prices are increasingly influenced by these new players.

Models used for applied policy analysis must reflect these new paths of utilisation alongside the more "traditional" ones as food or feed use.

Target Group

Approach

Historical data concerning the utilisation of agricultural commodities as input for food, feed, energy and industrial processes is our point of departure.

We compile and update these data based on official statistics provided by EUROSTAT, the OECD, the FAO as well as national statistics offices. Where necessary, we complement official information with findings from the scientific literature as well as from professional associations like the Fachagentur für Nachwachsende Rohstoffe (FNR).

In dialogue with policy makers, based on legal texts and their respective reform proposals we identifiy the policy instruments that are relevant for non-traditional uses of biomass. Our task is to translate these into mathematical relations and to include them into the existing system of model equations.

Our models allow us to simulate policy changes, e.g. the limitation of the use of biofuels produced from food crops (so-called `first generation´ biofuels). Thereby, we gain insight into the impact of this policy change on agricultural markets in Germany, Europe and the rest of the world. 

From our analysis of scenarios encompassing the nuclear phase out and the increasing use of biomass for energy purposes we gain a comprehensive picture of the impact of these energy policy reforms on the entire economy.

Data and Methods

Centrepiece of our work are the economic models AGMEMOD (Agricultural Memberstate Modelling), MAGNET (Modular Applied GeNeral Equilibrium Tool) and MERA (Model of Economic Resource Analysis).

AGMEMOD is particularly adapted to questions concerning the EU agricultural policy.

The strength of the MAGNET model is the global representation of the agricultural markets including all linkages with the rest of the economy.

The focus of MERA is the comprehensive description of different uses of biomass including a detailed record of economic relations in Germany´s energy sector.

Our Research Questions

What impacts do biofuel policies have on agricultural markets?

What are the effects of the nuclear phase out on the German economy?

Thünen-Contact

• Banse, Martin Institute of Market Analysis

Involved Thünen-Partners

• Banse, Martin Institute of Market Analysis
• Rothe, Andrea Institute of Market Analysis
• Salamon, Petra Institute of Market Analysis
• Wolf, Verena Institute of Market Analysis
• Wolf, Verena Institute of Market Analysis

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