Why large-scale bioenergy production on marginal land is unfeasible: A conceptual partial equilibrium analysis

A transparent and conceptual partial equilibrium model of global land use is used to explore long-term effects of large-scale introduction of bioenergy, under different policy cases. The transparency of the model, and the consideration of clear-cut policies, provides a clear picture of how main mechanisms of land-use competition work, and how they influence the food and bioenergy systems. The model is subjected to a detailed characterization, in which parameters critical to the results and conclusions are detected and their impacts depicted. A large-scale introduction of bioenergy would raise food prices in all cases/scenarios investigated, and relative price increases of extensively produced crops would be at least twice as high as compared to intensively produced crops. Banning production of bioenergy from the most productive land (limiting production to "marginal land") would reduce this price impact. However, we show that bioenergy is unlikely to ever be produced on any commercial scale only on land of low productivity. The economic incentives would be strong for owners of more productive land to grow bioenergy anyway and out-compete the more costly production on low yielding land. Large-scale deforestation would become attractive in response to increased bioenergy demand, especially for extensive production systems such as grazing. (C) 2012 Elsevier Ltd. All rights reserved.