Economic potential of biomass based fuels for greenhouse gas emission mitigation

This paper examines the role biofuels could potentially fill in reducing greenhouse gas emissions by decreasing combustion of fossil fuels. Currently, biofuels are not economically viable if not subsidized. The authors apply a US Agricultural sector model (ASM) to assess how the production and processing of biofuels could be incorporated into a greenhouse gas mitigation market. Emission coefficients for agricultural practices are estimated with crop growth simulation models and hypothetical carbon prices are used to simulate markets and policies. The model results suggest that if carbon prices are at or below $40 / ton, there is no incentive for biofuels; soil tillage and afforestation are more economic mitigation approaches. If carbon prices exceed $70, biofuels become the most viable agricultural mitigation option.