This study develops a generalized evaluation framework that can be used to quantify the financial, economic, stakeholder, and environmental impacts of renewable energy support programs. The application of this framework is demonstrated by evaluating the feed-in tariff (FIT) program for solar distributed energy resources (DER) in Ontario, Canada. Our analysis reveals that Ontario’s FIT program has successfully promoted the adoption of solar DER across communities. However, the program has caused inequitable societal outcomes through a cross-subsidization with a present value of 9 CAD billion, paid for by the electricity consumer base for the benefit of only the 0.06 percent of electricity consumers who could install solar systems. The cost imposed on the Canadian economy ranges from 2.86 to 5.37 CAD billion, depending on the discount rate applied. The sensitivity analysis results indicate that the burden of this program on the Canadian economy would have been reduced by 50 percent if the program had been delayed and implemented in 2016 instead of 2010 due to the declining trend in solar system investment costs. The lessons from this analysis provide insights for designing future environmental and emission reduction policies.

This article critically analyses the opportunities for Australia to revitalise its strategically important manufacturing sector in the wake of the COVID-19 pandemic. It considers Australia’s industry policy options on the basis of both advances in the theory of industrial policy and recent policy proposals in the Australian context. It draws on recent work from The Australia Institute’s Centre for Future Work examining the prospects for Australian manufacturing renewal in a post-COVID-19 economy, together with other recent work in political economy, economic geography and labour process theory critically evaluating the Fourth Industrial Revolution (i4.0) and its implications for the Australian economy. The aim of the article is to contribute to and further develop the debate about the future of government intervention in manufacturing and industry policy in Australia. Crucially, the argument links the future development of Australian manufacturing with a focus on renewable energy.

Planning for a low-carbon future in Australia will need to address simultaneously three aspects of sustainable development: centralisation/regional development, mobility and communication. After reviewing existing roadmaps for low-carbon growth by 2050, the article identifies the importance for Australia of an integrated and mutually reinforcing set of measures, based on a bold approach to urban and regional planning. Taking account of national geography, the approach is based on the decentralisation of energy production, use and storage, and on new uses of communication, transport and the location of food, water and mineral resources. Revitalised regional centres could be connected, through new energy and transport solutions, by a national transport arc and electrified highways. The use of infrastructure funding to support low-carbon regional development would avoid the ‘tragedy of the commons’, transcending incremental, cumulative approaches based on compensation and incentives for household, business and sectoral abatement efforts. It would generate long-term environmentally sustainable development.

The growing prevalence of clean energy raises the question of possible associated externalities. This article studies the effects of nuclear power plant development (and, as a result, the increased amount of water in the atmosphere from evaporative cooling systems) on nearby crop yields and finds that an average nuclear power plant increases local soybean yields by 2 and corn yields by 1 percent. Considering the low elasticity of demand for these crops, the yield increases translate to annual net benefits of $229 million (2020 US dollars) – $317 million in losses to farmers and $546 million in benefits to consumers.

This study uses an econometric approach to investigate the role of IPR protection on renewable energy adoption using panel data of 102 countries at five-year intervals over the period 1990–2005. The Ginarte-Park index is used as a measure of the strength of intellectual property protection while the adoption of renewable energy is measured by the share of renewable energy in total final energy use. The results reveal that the level of intellectual property rights protection and reform of the intellectual property rights regime do not have significant impact on renewable energy adoption, suggesting that IPR protection is not a cause for concern in the global quest for clean energy transition. On the contrary, we find that trade openness has a stronger influence in the transition to clean energy. Based on the findings of the study, we conclude that IPR protection does not influence renewable energy adoption except in high R&D countries; rather policy makers should concentrate efforts on economic factors, such as trade openness, that drive the adoption of renewable energy technologies.

Biogas created from anaerobic digestion on dairy farms can be used to generate electricity, produce coproducts, and reduce reliance on off-farm inputs. We incorporate risk into simulation models representing dairy farms in Texas and demonstrate the profitability of new anaerobic digester installation. Based on this market, results indicate projects that have low investment costs, receive grant support for construction, utilize coproducts, or have some combination of these factors have higher net present value at the end of the study period; however, even with generous grant support and high electricity prices, projects with average investment costs remain unprofitable.

Anaerobic digestion systems can reduce greenhouse gas emissions while turning waste products into energy. Past U.S. economic research on anaerobic digesters has studied dairy farms, but limited economic information is available on anaerobic digestion systems for swine. Net present values (NPVs) were calculated for biodigesters and covered lagoons under different coproduct and policy scenarios. With no government intervention, covered lagoons are more promising for swine operations than more capital-intensive biodigesters. As there is interest in subsidizing anaerobic digestion systems, subsidies equal to a $38/t social cost of carbon would provide positive NPVs.

This article analyzes economic tradeoffs among harvest date, fertilizer applied, nutrient removal, and switchgrass yield as they vary with respect to input and output prices. Economic sensitivity analyses suggest that higher biomass prices lead to earlier harvest. Optimal harvest time occurs beyond time of maximum yield because nutrient removal in the biomass is an important economic consideration. Switchgrass price premia that reflect the cost of non-optimal harvest time are driven by standing crop yield loss, nutrient removal, storage loss, and opportunity cost. These price premia could provide a mechanism to compensate producers for alternative harvest times and aid with logistics management.

This study evaluates optimal investment decision rules for an energy beet ethanol firm to exercise the option to invest, mothball, reactivate, and exit the ethanol market, considering uncertainty and volatility in the market price of ethanol, feedstock, and irreversible investment. A real options framework is used to compute gross margins of ethanol that trigger entry into and exit from the ethanol market. Results show that volatility in ethanol gross margins has much greater effects on exit and entry decisions than investment costs, and it also causes firms to wait longer before entering the ethanol market and, once active, to wait longer before exiting.

This study summarizes research on farm-, local-, regional-, and macro-level economic effects of ethanol production. Given current production levels, the ethanol production industry annually employees approximately 3,500 workers, pays out nearly $132 million in worker salaries, generates over $110 million in local taxes, and takes in some $2 billion in government incentive payments. Projections for a 60 million gallon per year ethanol plant indicate an annual increase in corn usage of 21 million bushels, a one-time capitalization of $75 million, an increase in local corn prices of between $0.06/bushel and $0.12/bushel, a 54 direct and a 210 indirect jobs created, an increase in local tax revenues of $1.2 million, a decrease in federal commodity program outlays of $30 million, and an increase in ethanol production incentives (federal only) of around $30.5 million.

This study examines the rapidly expanding biofuels industry and identifies challenges for producer-owned biofuel projects. The U.S. ethanol industry has been growing rapidly, and biodiesel production is poised for similar growth. Producer involvement is driven by the desire to add value to farm commodities and the impact of biofuel projects on local grain prices. Local state and federal incentives have also stimulated producer interest. The long-run profitability of biofuel projects is driven by feedstock availability, access to market centers for biofuels, access to markets for coproducts, and utility costs and availability. The rapidly increasing size and scale of ethanol and biodiesel plants make it difficult for producers to fund these projects. Additionally, the development and adoption of new non-grain biofuel technologies may negate some comparative advantages of producers, such as feedstock cost and availability. The geographic expansion of biofuel projects into grain deficit regions will also create additional challenges.

The economic competitiveness of biobased industries is discussed by comparing the South relative to other regions of the United States and biomass as a feedstock source relative to fossil fuels such as coal and petroleum. An estimate of the biomass resource base is provided. Estimated changes in the agricultural sector over time resulting from the development of a large-scale biobased industry are reported, and a study on the potential to produce electricity from biomass compared with coal in the southern United States is reviewed. A biobased industry can increase net farm income and enhance economic development and job creation.

This article presents current investment and operating costs of ethanol and biodiesel plants for alternative prices of feedstock. The price of these two fuels is estimated for alternative prices of crude oil with the existing renewable fuels policy. The excise tax credit, currently $0.51 per gallon of ethanol and $1.00 per gallon of biodiesel, is a major contributor to the fuel price and profitability of these industries. The analysis demonstrates how the crude oil price, feedstock price, and excise tax credits interact to impact profitability of these industries.

Increased use of alternative fuels and low commodity prices have contributed to the recent expansion of the U.S. ethanol industry. As with any competitive industry, some level of output price risk exists in the form of volatility; yet, no actively traded ethanol futures market exists to mitigate output price risk. This study reports estimated minimum variance cross-hedge ratios between Detroit spot cash ethanol and the New York Mercantile Exchange unleaded gasoline futures for 1-, 4-, 8-, 12-, 16-, 20-, 24-, and 28-week hedge horizons. The research suggests that a one-to-one cross-hedge ratio is not appropriate for some horizons.

The Southeastern United States depends on coal to supply 60% of its electricity needs. The region leads in CO2 emissions and ranks second in emissions of SO2 and NO2. Compared with coal, biomass feedstocks have lower emission levels of sulfur or sulfur compounds and can potentially reduce nitrogen oxide emissions. This study examines the economic impacts of cofiring biomass feedstocks with coal in coal-fired plants under three emission credit and two cofiring level scenarios. Economic impacts are estimated for producing, collecting, and transporting feedstock; retrofitting coal-fired utilities for burning feedstock; operating cofired utilities; and coal displaced from burning the feedstock.

As the hunt for renewable energy sources from agriculture intensifies, many agricultural producers are contemplating what crops to grow in the foreseeable future. On the one hand, there are traditional food crops, such as soybean, corn, and wheat, which have recently enjoyed a spike in prices, primarily because of the seemingly ever-growing demands of the corn to ethanol industry. On the other hand, there are the lesser-known perennial energy crops, such as switchgrass. Although much information on various aspects of switchgrass production exists, this paper discusses the adaptation of existing production and processing information to Arkansas conditions as a potential alternative to crop production.

Anaerobic digesters that capture and burn manure methane can provide arenewable source of energy and reduce greenhouse gas emissions. Payingproducers for these emission reductions—either directly or through a carbonoffset market—could substantially increase digester adoption. However, thereis likely to be wide variation in the scale, location, and characteristicsof adopters, so these policies could have long run structural implicationsfor the livestock sector. Using a model of digester profits and data from anationally-representative survey of dairy operations we estimate the likelydistribution of digester adoption and profits under different carbon pricescenarios.

First-generation grain ethanol biofuel has affected the historical excess capacity problem in U.S. agriculture. Second-generation cellulosic ethanol biofuel has had difficulty achieving cost-competitiveness. Third-generation drop-in biofuels are under development. If lignocellulosic biomass from perennial grasses becomes the feedstock of choice for second- and third-generation biorefineries, an integrated system could evolve in which a biorefinery directly manages feedstock production, harvest, storage, and delivery. Modeling was conducted to determine the potential economic benefits from an integrated system. Relatively low-cost public policies that could be implemented to facilitate economic efficiency are proposed.

The increase in energy prices between 2004 and 2007 has several potential consequences for aggregate agriculture in the U.S. We estimate the derived input demand elasticities for energy as well as capital, labor, and materials using the differential supply formulation. Given that the derived input demand for energy is inelastic, it is more price-responsive than the other inputs. The results also indicate that the U.S. aggregate agricultural supply function is responsive to energy prices.

As a result of the increase in the real cost of fossil fuel-based energy in recent years, federal and state governments have taken a more active role in energy policy by creating incentives to develop alternative sources of energy, including biofuels. However, policymakers often become focused on the specific type of energy and not the energy services consumers ultimately value. The lack of recognition of energy as a commodity results in policies that ignore the characteristics of the associated markets: easy entry and exit, no barriers to entry, and sensitivity to changes in supply and demand. Consequently, energy industries may fail to arise because entrepreneurs must be able to account for all costs and earn—at a minimum—a competitive return on the investment. This article evaluates the options available to policymakers related to biofuels, which are of particular concern to the South, and includes an assessment of the knowledge base on which policy decisions are made.