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ID: 125626

Dynamic simulation of the ILUC effects of biofuel use in the US / Oladosu, Gbadebo; Kline, Keith

Oladosu, Gbadebo	Journal Article
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2013.

Summary/Abstract

The global indirect land use change (ILUC) implications of biofuel use in the United States of America (USA) from 2001 to 2010 are evaluated with a dynamic general equilibrium model. The effects of biofuels production on agricultural land area vary by year; from a net expansion of 0.17 ha per 1000 gallons produced (2002) to a net contraction of -0.13 ha per 1000 gallons (2018) in Case 1 of our simulation. In accordance with the general narrative about the implications of biofuel policy, agricultural land area increased in many regions of the world. However, oil-export dependent economies experienced agricultural land contraction because of reductions in their revenues. Reducing crude oil imports is a major goal of biofuel policy, but the land use change implications have received little attention in the literature. Simulations evaluating the effects of doubling supply elasticities for land and fossil resources show that these parameters can significantly influence the land use change estimates. Therefore, research that provides empirically-based and spatially-detailed agricultural land-supply curves and capability to project future fossil energy prices is critical for improving estimates of the effects of biofuel policy on land use.

Key Words

Biofuels ; Income Effects ; Land - Use

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ID: 092801

Identifying the oil price-macroeconomy relationship: an empirical mode decomposition analysis of US data / Oladosu, Gbadebo

Oladosu, Gbadebo	Journal Article
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Publication

2009.

Summary/Abstract

This paper employs the empirical mode decomposition (EMD) method to filter cyclical components of US quarterly gross domestic product (GDP) and quarterly average oil price (West Texas Intermediate-WTI). The method is adaptive and applicable to non-linear and non-stationary data. A correlation analysis of the resulting components is performed and examined for insights into the relationship between oil and the economy. Several components of this relationship are identified. However, the principal one is that the medium-run component of the oil price has a negative relationship with the main cyclical component of the GDP. In addition, weak correlations suggesting a lagging, demand-driven component and a long-run component of the relationship were also identified. Comparisons of these findings with significant oil supply disruption and recession dates were supportive. The study identifies a number of lessons applicable to recent oil market events, including the eventuality of persistent oil price and economic decline following a long oil price run-up. In addition, it was found that oil market related exogenous events are associated with short- to medium-run price implications regardless of whether they lead to actual supply losses.

Key Words

Oil price ; United States ; US ; Macroeconomy ; Empirical Mode Decomposition ; Oil - Price

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