Dedicated Energy Crops and Competition for Agricultural Land

Dedicated energy crops, such as switchgrass in the United States, have received much attention as potential renewable feedstocks for liquid fuels or bioelectricity; however, markets do not presently exist for large-scale use of this resource. This study examines three policy scenarios that could create a market for bioelectricity using dedicated energy crops: a subsidy for bioelectricity generation, a national Renewable Portfolio Standard (RPS), and a national cap-and-trade policy to limit carbon dioxide (CO2) emissions. Model results suggest that energy crops as a share of total cropland by region would be greatest in the Northern Plains, Southeast, and Appalachia. Even though the impact of energy crop production on land use across scenarios is similar by design, the impacts on other model outputs are quite different, including the mix of electricity-generating technologies, the price of electricity, CO2 emissions, and the cost relative to a no-policy reference scenario. For example, the price of electricity increases with cap-and-trade but declines with a bioelectricity subsidy. In all scenarios, U.S. CO2 emissions decrease relative to the reference scenario. Emissions reductions are greatest in the cap-and-trade scenario, but significant reductions are also obtained with an RPS.

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Economic Research Report
Number 223

 Record created 2017-04-01, last modified 2018-01-23

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