AEM 2110 - The Business of Biofuels

Fall (weeks 1-7). 1.5 credits. S/U grades only.

Prerequisite: ECON 1110.

H. de Gorter.

After defining biofuels and identifying patterns of production, consumption and trade, several central issues on the economics and business of biofuels are addressed. These include an assessment of how effective biofuel policies are in meeting the various political goals, how biofuel policies established the crop-energy price link and hence the food-fuel trade-off, the unique contradictory and self-defeating effects of effects of combining mandates with different subsidies, the various surprising economic welfare effects of biofuel policies; and the various inconsistencies associated with binary sustainability standards, induced land use change and carbon leakages. The course will take a close look at the various factors that have created the rise of the biofuel industry and how the structure of crude oil refining, blending and retailing have consequently changed.

Outcome 1: Analyze how the biofuel industry got started, the technological and economic challenges faced and the consequences of government policies.

Outcome 2: Assess how well the broad spectrum of proclaimed environment, energy and agricultural policy goals of biofuel policies have been achieved by learning the many perverse and contradictory effects of biofuel mandates, subsidies, import barriers, binary sustainability standards and indirect land use measures.

Outcome 3: Interpret how biofuel policies caused the world food crisis in 2008 and 2011 and high food commodity prices to this day.

Outcome 4: Identify how biofuels impacted the structure of the crude oil refining, blending and retailing industries.