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What are the main criticisms economists make of EU biofuels policy?

Kevin Lynch Economics of Food Markets Tuesday, 16 th January 2008 Trinity College, Dublin. What are the main criticisms economists make of EU biofuels policy?. Motivations for Policies. 1. Climate Change 2. Energy Security: unstable or unfavourable regimes, rising prices, peak oil

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What are the main criticisms economists make of EU biofuels policy?

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  1. Kevin Lynch Economics of Food Markets Tuesday, 16th January 2008 Trinity College, Dublin What are the main criticisms economists make of EU biofuels policy?

  2. Motivations for Policies 1. Climate Change 2. Energy Security: unstable or unfavourable regimes, rising prices, peak oil 3. Rural development

  3. Incorrect tools Demand side measures A Carbon Tax? • Climate Change – reduces carbon directly • Security conservation • Budgetary pressures of subsidies • Uncertainity Command and control if inefficient and proposes a solution rather than identifies a problem

  4. General Equilibrium Approach Life cycles Complex interactions with food and energy markets Technically complex – factor markets Opportunity cost with food

  5. Trade policy Protectionism flourishing Simulations show a strong link between trade and development of bio-fuels Favouring home grown solutions – a new CAP? Infant Industry argument Time scale Feasibility

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