Abstract

Agriculture-based biofuels have the potential to replace fossil fuels, thereby offsetting greenhouse gas emissions. In this paper, the authors estimate emission abatement supply curves from energy crops switchgrass, hybrid poplar, and willow under a wide range of sector-wide greenhouse gas emission reduction incentives in U.S. agriculture. The Agricultural Sector Model employed captures market interactions of biofuel production with traditional agricultural production and with alternative emission mitigation strategies. U.S. results suggest an increasing importance of biomass-based electricity for carbon mitigation incentives above an economic threshold of $50 per ton. At incentive levels of $170 per ton and higher, emission offsets from energy crops provide the highest net emission reduction among all agricultural options. To extrapolate U.S. findings and assess the economic viability of energy crops in Asian Pacific countries, the authors conducted a sensitivity analysis on key parameters of the U.S. model, and find implementation of energy crops to be highly sensitive to biomass yields and agricultural land base. While U.S. crop yields can be matched in warm tropical climates, the available agricultural land base per capita is much smaller in most Asian-Pacific countries.