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Abstract
Biofuels have been promoted to achieve energy security and as a solution to mitigating
climate change. This research presents a framework to examine the extent to which biofuel
mandates and subsidies reduce gasoline consumption and their implications for the food and fuel
prices. A dynamic, multi-market equilibrium model, Biofuel and Environmental Policy Analysis
Model (BEPAM), is used to estimate the effects of these policies on cropland usage between
food crops and fuel crops and food and fuel prices, and to analyze the incentives provided by
alternative policies for the mix of biofuels from corn and various cellulosic feedstocks that are
economically viable over the 2007-2022 period. The provision of biofuel subsidies that
accompany the mandate under the Renewable Fuel Standard (RFS) is found to significantly
change this mix in favor of cellulosic biofuels produced from high yielding grasses and reduce
the adverse impact of the RFS alone on food prices.