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Global Economic Effects of US Biofuel Policy and the Potential Contribution from Advanced Biofuels...

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703 to 723

Background: This study evaluates the global economic effects of the USA renewable fuel standards (RFS2), and the potential contribution from advanced biofuels. Results/discussion: Our simulation results imply that these mandates lead to an increase of 0.21 percent in the global gross domestic product (GDP) in 2022, including an increase of 0.8 percent in the USA and 0.02 percent in the rest of the world (ROW); relative to our baseline, no-RFS scenario. The incremental contributions to GDP from advanced biofuels in 2022 are estimated at 0.41 percent and 0.04 percent in the USA and ROW, respectively. Conclusions: Although production costs of advanced biofuels are higher than for conventional biofuels in our model, their economic benefits result from reductions in oil use, and their smaller impacts on food markets compared with conventional biofuels. Thus, the USA advanced biofuels targets are expected to have positive economic benefits.