We describe an approach for incorporating biomass energy production and competition for land into the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium model of the world economy, that has been widely used to study climate change policy. We examine multiple scenarios where greenhouse gas emissions are abated or not. The global increase in biomass energy use in a reference scenario (without climate change policy) is about 30 EJ/year by 2050 and about 180 EJ/year by 2100. This deployment is driven primarily by a world oil price that in the year 2100 is over 4.5 times the price in the year 2000. In the scenarios of stabilization of greenhouse gas concentrations, the global biomass energy production increases to 50-150 EJ/year by 2050 and 220-250 EJ/year by 2100. The estimated area of land required to produce 180-250 EJ/year is about 2Gha, which is an equivalent of the current global crop area. In the USA we find that under a stringent climate policy biofuels could supply about 55% of USA liquid fuel demand, but if the biofuels were produced domestically the USA would turn from a substantial net exporter of agricultural goods ($20 billion) to a large net importer ($80 billion). The general conclusion is that the scale of energy use in the USA and the world relative to biomass potential is so large that a biofuel industry that was supplying a substantial share of liquid fuel demand would have very significant effects on land use and conventional agricultural markets.

(Chapter available by request)

About the book: Land has long been overlooked in economics. That is now changing. A substantial part of the solution to the climate crisis may lie in growing crops for fuel and using trees for storing carbon. This book investigates the potential of these options to reduce greenhouse gas emissions, estimates the costs to the economy, and analyses the trade-offs with growing food. The first part presents new databases that are necessary to underpin policy-relevant research in the field of climate change while describing and critically assessing the underlying data, the methodologies used, and the first applications.

Together, the new data and the extended models allow for a thorough and comprehensive analysis of a land use and climate policy. This book outlines key empirical and analytical issues associated with modelling land use and land use change in the context of global climate change policy. It places special emphasis on the economy-wide competition for land and other resources, especially;

• The implications of changes in land use for the cost of climate change mitigation,
• Land use change as a result of mitigation, and
• Feedback from changes in the global climate to land use.

By offering synthesis and evaluation of a variety of different approaches to this challenging field of research, this book will serve as a key reference for future work in the economic analysis of land use and climate change policy.

© 2009 Routledge