Title
Are Subsidies for Biodiesel Economically Efficient?
Document Type
Article
Department or Administrative Unit
Economics
Publication Date
12-2006
Abstract
Biodiesel produces less pollution than petrodiesel; however, it is more expensive and will only be a viable alternative if market prices of the products are comparable. This paper examines whether the external benefits from biodiesel use justify subsidies required for adoption outside of niche alternative fuel markets. The authors establish a range of subsidies required to make biodiesel a viable substitute for petrodiesel. Published estimates of the emissions reductions from biodiesel and the dollar benefits of unit reductions in emissions are used to compute a per-gallon external benefit from use of biodiesel, versus petrodiesel. Under conservative estimates of the benefits from biodiesel use in non-road equipment, the external benefits outweigh the required subsidies.(JEL Q48, Q42, H2)
Recommended Citation
Wassell, C. S., & Dittmer, T. P. (2006). Are subsidies for biodiesel economically efficient? Energy Policy, 34(18), 3993–4001. https://doi.org/10.1016/j.enpol.2005.09.024
Journal
Energy Policy
Rights
Copyright © 2005 Elsevier Ltd. All rights reserved.
Comments
This article was originally published in Energy Policy. The full-text article from the publisher can be found here.
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