GTAP Resources: Resource Display
| GTAP Resource #3325 |
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"Biofuels’ Role in Mexico’s Rural Development " by Dyer, George Abstract Biofuels are expected to promote growth, create jobs, and reduce poverty and inequality in developing areas while contributing to environmental sustainability. Achieving these goals will require accounting for their potential synergies and tradeoffs while addressing causal interactions across scales. An agent-based, general-equilibrium model of rural Mexico is used to analyze the challenges of this country’s recent biofuels initiative. Results reveal that modest increases in crop prices could generate substantial feedstock surpluses for biofuels based on either corn or alternative crops, representing US$236 - $273 million in annual sales. Significant profits in feedstock production would raise land rents at the forest margin. A corn-based industry would increase forests’ opportunity costs up to 2.0%, particularly in Southeast Mexico. One based on alternative crops could raise them substantially more, particularly in Central Mexico, entailing significant land-cover changes. The feedstock sector would promote commercial agriculture but generate scant economic growth in rural areas. A highly mobile migrant labor force could keep wage increases small and temporary. Stagnant wages and rising food prices ultimately could reduce rural purchasing power with mixed implications on food security. Rural food deficits could decrease, but on-farm consumption would also contract markedly whether feedstocks are based on staples or cash crops. While absentee producers and landlords will be the major beneficiaries of the Mexican biofuels industry, no mechanisms have been contemplated to mitigate adverse impacts on rural wellbeing and land use. Assessments of biofuels’ potential in other developing countries, particularly Sub-Saharan Africa, should be reconsidered using a similar methodology. |
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- Domestic policy analysis - Agricultural policies - Economic development - Renewable energy - Calibration and parameter estimation - North America |
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Public Access  GTAP Resource 3325 (107.7 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 8/11/2025 9:05:27 AM
