On the usage of agricultural raw materials--energy or food? An assessment from an economics perspective

Abstract

Bioenergies are promoted across the globe as the answer for global warming and the chance to reduce dependency from fossil energy sources. Despite the fact that renewable energy sources offer the opportunity to reduce CO2 emission and present a chance to increase agricultural incomes, they also come along with some drawbacks that have been mostly neglected in the current discussion. This paper seeks to build a basis for discussing the impacts of the growing subsidization of bioenergy and the resulting usage competition of agricultural raw materials between foods and energy. To assess the usage competition and the subsidization of bioenergy, this article employs a welfare economics perspective associated with an emphasize on the construct of externalities. This will help to foster the discussion on the further subsidization of bioenergy, where funding for R&D on new ways of using non-food raw materials ought to play a significant role.