December 27, 2009

Modelling the Costs of Energy Crops: A Case Study of U.S. Corn and Brazilian Sugar Cane

by A. Méjean and C. Hope

- High crude oil prices, uncertainties about the consequences of climate change and the eventual decline of conventional oil production raise the prospects of alternative fuels, such as biofuels. This paper describes a simple probabilistic model of the costs of energy crops, drawing on the user’s degree of belief about a series of parameters as an input. This forward-looking analysis quantifies the effects of production constraints and experience on the costs of corn and sugar cane, which can then be converted to bioethanol.

A. Méjean and C. Hope (2009). "Modelling the Costs of Energy Crops: A Case Study of U.S. Corn and Brazilian Sugar Cane." Electricity Policy Research Group, Working Paper EPRG0924, Oct 2009.