Modeling biofuels policies in general equilibrium: insights, pitfalls and opportunities

Over the past decade, biofuels production in the EU and US has boomed – much of this due to government mandates and subsidies. The US has now surpassed Brazil as the world’s leading
producer of ethanol. The economic and environmental impact of these biofuel programs has become an important question of public policy. Due to the complex intersectoral linkages
between biofuels and crops, livestock as well as energy activities, CGE modeling has become an important tool for their analysis. This report reviews recent developments in this area of
economic analysis, and suggests directions for future research.