Chapter 7

Measuring the Subsidy Component of Biofuel Tax Credits and Exemptions

Erika M. Kliauga, Harry de Gorter and David R. Just


The subsidy component of biofuel policies is complicated because of the forward linkage to oil markets. The subsidy associated with tax exemptions is overestimated because consumers purchase fuel for mileage, but fuel taxes are based on volume. Furthermore, the policies of one country establish the link between biofuel and oil prices, so tax exemptions in other countries subsidize gasoline consumption and do not directly increase biofuel prices. The gap between the intercept of the ethanol supply curve and the oil price means part of the subsidy is benefitting no one. As a result, countries like Brazil do not subsidize ethanol production as much as it would appear.

Total Pages: 49-64 (16)

Purchase Chapter  Book Details


.Intellectual Property Basic Manual for Researchers in Universities.
.Research on Corporate Environmental Responsibility in China.
.Firms’ Strategic Decisions: Theoretical and Empirical Findings.
.Firms’ Strategic Decisions: Theoretical and Empirical Findings.
.Systematic Architectural Design for Optimal Wind Energy Generation.
.Thermal Cycles of Heat Recovery Power Plants.
.Solar Chimney Power Plants: Numerical Investigations and Experimental Validation.
.Renewable Energy Engineering: Solar, Wind, Biomass, Hydrogen and Geothermal Energy Systems.