January 23, 2011

Will Biofuel Mandates Raise Food Prices?

by Ujjayant Chakravorty, Marie-Hélène Hubert, Michel Moreaux and Linda Nostbakken

- Biofuels have received a lot of attention as a substitute for gasoline in transportation. They have also been blamed for recent increases in food prices. Both the United States and the European Union have adopted mandatory blending policies that require a sharp increase in the use of biofuels. In this paper, we examine the effect of these mandates on food prices and carbon emissions. The model we use considers future world population growth and income-driven changes in dietary preferences towards higher meat and dairy consumption as well as heterogenous land quality.

Chakravorty, U., M-H Hubert, M. Moreaux and L. Nostbakken (2011). "Will Biofuel Mandates Raise Food Prices?" University of Alberta, Working Paper No. 2011.01, Jan 2011.