Are Biofuels the Best Use of Sunlight?

Abstract

This article develops a dynamic micro-economic land use model to identify the cost-effective allocation of cropland for traditional row crops and perennial grasses and the mix of cellulosic feedstocks needed to meet predetermined biofuel targets over the 2007–2022 period. Yields of perennial grasses obtained from a biophysical model and together with county level data on costs of production for Illinois are used to examine the implications of these targets for crop and biofuel costs, greenhouse gas emissions, and nitrogen use. The economic viability of cellulosic feedstocks is found to depend on their yields per acre and the opportunity cost of land. The mix of viable cellulosic feedstocks varies spatially and temporally with corn stover and miscanthus coexisting in the state; corn stover is viable mainly in central and northern Illinois while miscanthus acres are primarily located in southern Illinois. Biofuel targets lead to a significant shift in acreage from soybeans and pasture to corn and a change in crop rotation and tillage practices. The biofuel targets assumed here lead to a reduction in greenhouse gas emissions, but an increase in nitrogen use.