Jason P.H. Jones

• In the short-run, this paper found a muted global fuel rebound effect.
• Fuel consumption is not impacted by changes in global crude oil prices.
• The global gasoline price elasticity with respect to crude oil peaks at 0.36.
• The global diesel price elasticity with respect to crude oil peaks at 0.37.
• National fuel price regimes influence pass-through of global crude oil prices.

Abstract
Given the interconnectedness of global oil markets, significant changes in oil… Show more

• In the short-run, this paper found a muted global fuel rebound effect.
• Fuel consumption is not impacted by changes in global crude oil prices.
• The global gasoline price elasticity with respect to crude oil peaks at 0.36.
• The global diesel price elasticity with respect to crude oil peaks at 0.37.
• National fuel price regimes influence pass-through of global crude oil prices.

Abstract
Given the interconnectedness of global oil markets, significant changes in oil consumption in one country could have a spillover impact on international oil consumption. This concept, often referred to as the global rebound effect, estimates how changes in fuel consumption in an individual country influences world fuel prices and subsequent changes on world fuel consumption. Using monthly retail fuel price and consumption data, we build structural vector autoregressive (SVAR) models for 63 countries, which together represent nearly 70% of global refined oil consumption to examine the issue of the global rebound effect. We break out price and consumption elasticities by fuel type (i.e., gasoline versus diesel) and by fuel price policy groupings (i.e., liberalized/ad-hoc), as well as provide individual country and full sample price and consumption elasticities. We find muted impacts of changes in world crude oil prices on global oil consumption. These results suggest that in the short-run country-specific policies that influence oil consumption may not have significant global rebound effects. Show less

Understanding greenhouse gas mitigation potential of the U.S. agriculture and forest sectors is critical for evaluating potential pathways to limit global average temperatures from rising more than 2◦ C. Using the FASOMGHG model, parameterized to reflect varying conditions across shared socioeconomic pathways, we project the greenhouse gas mitigation potential from U.S. agriculture and forestry across a range of carbon price scenarios. Under a moderate price scenario ($20 per ton CO2 with a… Show more

Understanding greenhouse gas mitigation potential of the U.S. agriculture and forest sectors is critical for evaluating potential pathways to limit global average temperatures from rising more than 2◦ C. Using the FASOMGHG model, parameterized to reflect varying conditions across shared socioeconomic pathways, we project the greenhouse gas mitigation potential from U.S. agriculture and forestry across a range of carbon price scenarios. Under a moderate price scenario ($20 per ton CO2 with a 3% annual
growth rate), cumulative mitigation potential over 2015–2055 varies substantially across SSPs, from 8.3 to 17.7 GtCO2e. Carbon sequestration in forests contributes the majority, 64–71%, of total
mitigation across both sectors. We show that under a high income and population growth scenario over 60% of the total projected increase in forest carbon is driven by growth in demand for forest
products, while mitigation incentives result in the remainder. This research sheds light on the interactions between alternative socioeconomic narratives and mitigation policy incentives which can help prioritize outreach, investment, and targeted policies for reducing emissions from and storing more carbon in these land use systems. Show less

• Models of biofuel-induced land use change differ in how they categorize land.
• Biofuel effects modeled with alternate land representations in a single model, GCAM.
• Land representation affects estimates of climate change mitigation by biofuels.

Abstract
Estimates of biofuel carbon intensity are uncertain and depend on modeled land use change (LUC) emissions. While analysts have focused on economic and agronomic assumptions affecting the quantity of land converted… Show more

• Models of biofuel-induced land use change differ in how they categorize land.
• Biofuel effects modeled with alternate land representations in a single model, GCAM.
• Land representation affects estimates of climate change mitigation by biofuels.

Abstract
Estimates of biofuel carbon intensity are uncertain and depend on modeled land use change (LUC) emissions. While analysts have focused on economic and agronomic assumptions affecting the quantity of land converted, researchers have paid less attention to how models classify land into broad categories and designate some categories as ineligible for LUC. To explore the effect of these land representation attributes, we use three versions of a global human and Earth systems model, GCAM, and compute the “carbon intensity of land-use change” (CI-LUC) from increased U.S. corn ethanol production. We consider uncertainty in model parameters along with the choice of land representation and find the latter is one of the most influential parameters on estimated CI-LUC. A version of the model that protects 90% of non-commercial land reduced estimated CI-LUC by an average of 32% across Monte Carlo trials compared to our baseline model. Another version that mimics the GTAP-BIO-ADV land representation, which protects all non-commercial land, reduced CI-LUC by an average of 19%. The results of this experiment demonstrate that land representation in biofuel LUC models is an important determinant of CI-LUC. Show less

Highlights
• Biofuels are seen as a critical component of U.S. strategies to reduce greenhouse gas emissions and
mitigate climate change.
• However, their impacts on many environmental metrics remain highly uncertain.
• We provide an up-to-date review of estimates of land use change in the U.S. attributable to biofuel policy.
• Economic modelling studies report 0.01–2.45 million acres of net cropland expansion per billion-gallon
increase in biofuel.
• Empirical… Show more

Highlights
• Biofuels are seen as a critical component of U.S. strategies to reduce greenhouse gas emissions and
mitigate climate change.
• However, their impacts on many environmental metrics remain highly uncertain.
• We provide an up-to-date review of estimates of land use change in the U.S. attributable to biofuel policy.
• Economic modelling studies report 0.01–2.45 million acres of net cropland expansion per billion-gallon
increase in biofuel.
• Empirical studies report a more constrained range of 0.38–0.66 million acres per billion-gallon increase in
biofuel volumes.

Abstract
Estimates of land use change (LUC) attributable to the U.S. Renewable Fuel Standard (RFS) are critical for evaluation of the program's impacts on air and water quality, biodiversity, and soil quality. To improve our understanding of the range of published estimates, we reviewed 29 studies published since 2008 attributing domestic LUC to the RFS, updating previous comparisons and adding a growing number of empirical approaches to estimating biofuel-induced LUC. To identify principal reasons underlying differences in reported effects, we documented key attributes of studies' methods including spatial extent, time period, baseline scenario, policy influence, and LUC definitions. Across computable general equilibrium (CGE) and partial equilibrium (PE) economic simulation model studies we found a range of 0.01–2.45 million acres of net cropland expansion per billion-gallon increase in biofuels. Empirical approaches reporting national-scale estimates fall within this range, reporting 0.38–0.66 million acres per billion-gallon increase. Empirical studies had a much smaller range of estimates and were closer to PE approaches than CGE. Studies generally did not represent all the potential drivers of biofuel production, and instead reported projections reflecting a combination of RFS impacts and other influences. Show less

We analyze the economic effects across various crop insurance subsidy and policy scenarios to determine producer insurance choice response, total premium and subsidy payments and study their economic implications on dryland corn, soybean, and winter wheat producers. We rely on the expected utility maximization framework to rank policy combination sets that are available to a typical producer to analyze the impacts of crop insurance subsidy changes and elimination of certain insurance policies… Show more

We analyze the economic effects across various crop insurance subsidy and policy scenarios to determine producer insurance choice response, total premium and subsidy payments and study their economic implications on dryland corn, soybean, and winter wheat producers. We rely on the expected utility maximization framework to rank policy combination sets that are available to a typical producer to analyze the impacts of crop insurance subsidy changes and elimination of certain insurance policies across the three crops. Several scenarios were analyzed across subsidy and policy options and were found to have noticeably different farmer behavioral responses and economic implications. Show less

In recent decades, the carbon sink provided by the U.S. forest sector has offset a sizable portion of domestic greenhouse gas (GHG) emissions. In the future, the magnitude of this sink has important implications not only for projected U.S. net GHG emissions under a reference case but also for the cost of achieving a given mitigation target. The larger the contribution of the forest sector towards reducing net GHG emissions, the less mitigation is needed from other sectors. Conversely, if the… Show more

In recent decades, the carbon sink provided by the U.S. forest sector has offset a sizable portion of domestic greenhouse gas (GHG) emissions. In the future, the magnitude of this sink has important implications not only for projected U.S. net GHG emissions under a reference case but also for the cost of achieving a given mitigation target. The larger the contribution of the forest sector towards reducing net GHG emissions, the less mitigation is needed from other sectors. Conversely, if the forest sector begins to contribute a smaller sink, or even becomes a net source, mitigation requirements from other sectors may need to become more stringent and costlier to achieve economy wide emissions targets. There is acknowledged uncertainty in estimates of the carbon sink provided by the U.S. forest sector, attributable to large ranges in the projections of, among other things, future economic conditions, population growth, policy implementation, and technological advancement. We examined these drivers in the context of an economic model of the agricultural and forestry sectors, to demonstrate the importance of cross-sector interactions on projections of emissions and carbon sequestration. Using this model, we compared detailed scenarios that differ in their assumptions of demand for agriculture and forestry products, trade, rates of (sub)urbanization, and limits on timber harvest on protected lands. We found that a scenario assuming higher demand and more trade for forest products resulted in increased forest growth and larger net GHG sequestration, while a scenario featuring higher agricultural demand, ceteris paribus led to forest land conversion and increased anthropogenic emissions.This finding highlights the potential limitations of single-sector modeling approaches that ignore important interaction effects between sectors. Show less

This modeling exercise aimed to establish precision in prediction of the potential healthcare cost savings that would follow a reduction in the incidence of cardiovascular disease (CVD) consistent with an increase in adherence to a Mediterranean-style diet (MedDiet).

The Forestry and Agriculture Sector Optimization Model with Greenhouse Gases
(FASOMGHG) has historically relied on regional average costs of land conversion to simulate land use change across cropland, pasture, rangeland, and forestry. This assumption limits the accuracy of the land conversion estimates by not recognizing spatial heterogeneity in land quality and conversion costs. Using data from Nielsen et al. (2014), we obtained the afforestation cost per county, then estimated… Show more

The Forestry and Agriculture Sector Optimization Model with Greenhouse Gases
(FASOMGHG) has historically relied on regional average costs of land conversion to simulate land use change across cropland, pasture, rangeland, and forestry. This assumption limits the accuracy of the land conversion estimates by not recognizing spatial heterogeneity in land quality and conversion costs. Using data from Nielsen et al. (2014), we obtained the afforestation cost per county, then estimated nonparametric regional marginal cost functions for land converting land to forestry.

These afforestation costs were then incorporated into FASOMGHG. Three different assumptions for land moving into the forest sector were run; constant average conversion cost, static rising marginal costs and dynamic rising marginal cost, in order to assess the implications of alternative land conversion cost assumptions on key outcomes, such as projected forest area and cropland use, carbon sequestration, and forest product output. Show less

This paper applies a spatial allocation optimization model to evaluate logging residue supply potential and costs for bioelectricity generation within the conterminous United States. Simulations are developed to estimate a range in supply potential and costs across a broad range of sensitivity scenarios, including (1) different biomass availability rates based on observed roundwood removals, (2) renewable energy targets set nationally or at a state-level, (3) with and without biomass sourcing… Show more

This paper applies a spatial allocation optimization model to evaluate logging residue supply potential and costs for bioelectricity generation within the conterminous United States. Simulations are developed to estimate a range in supply potential and costs across a broad range of sensitivity scenarios, including (1) different biomass availability rates based on observed roundwood removals, (2) renewable energy targets set nationally or at a state-level, (3) with and without biomass sourcing restrictions within a state, (4) with and without access to public lands, and (5) policy restrictions on eligible facility types. Under the least restrictive policy scenario (a hypothetical national mandate), total supply is 8.8 million dry tons (MDT) at $20/DT and increases to 32.5 MDT at $80/DT. Results fall within the range of previous logging residue supply studies in the U.S., including the last two Billion Ton reports. Results from this paper offer important policy insight into the potential cost efficiency of a flexible policy design. Sensitivity scenarios show potential supply cost increases that could result from policies imposing regional restrictions, limiting access to public lands, and restricting eligible facilities. Restricting biomass supply sources within state boundaries reduces total supply up to 10% relative to an unrestricted national policy. Show less

We used GSIM to predict the impact of China’s retaliatory tariffs on four major agricultural commodities—soybeans, cotton, sorghum, and pork. Based on our analysis, we predict that 1) prices of these commodities will fall by 0.6% (pork) to 10.6% (sorghum), 2) exports of these commodities to China will fall significantly (up to 83% in the case of pork), while exports to other countries will increase, and 3) U.S. producers will suffer significant losses due to the decline in exports and prices… Show more

We used GSIM to predict the impact of China’s retaliatory tariffs on four major agricultural commodities—soybeans, cotton, sorghum, and pork. Based on our analysis, we predict that 1) prices of these commodities will fall by 0.6% (pork) to 10.6% (sorghum), 2) exports of these commodities to China will fall significantly (up to 83% in the case of pork), while exports to other countries will increase, and 3) U.S. producers will suffer significant losses due to the decline in exports and prices (soybean producers will lose $1.8 billion).

However, other factors may attenuate or strengthen our predictions. For example, the Chinese government has implemented policies to increase soybean planting acreage at the cost of corn acreage, a commodity for which China has accumulated a high inventory. Such policy changes may result in exports of this commodity to fall even further, which would make our predictions a conservative estimate. Show less

The livestock sector is vulnerable to climate change and related policy in two ways. First, livestock production and performance are directly impacted by climate with many projected effects being negative. Second, the sector may need to alter operations to limit the effects of climate change through adaptation and mitigation. Potential adaptation strategies involve land use decisions, animal feeding changes, genetic manipulation and alterations in species and/or breeds. In terms of mitigation… Show more

The livestock sector is vulnerable to climate change and related policy in two ways. First, livestock production and performance are directly impacted by climate with many projected effects being negative. Second, the sector may need to alter operations to limit the effects of climate change through adaptation and mitigation. Potential adaptation strategies involve land use decisions, animal feeding changes, genetic manipulation and alterations in species and/or breeds. In terms of mitigation, livestock is a substantial contributor to global non-CO2 greenhouse gas emissions. Mitigation opportunities involve altered land use for grazing and feed production, feeding practices, manure treatment and herd size reduction. In addition, strengthening institutions that promote markets and trade, as well as local support programs can help both mitigation and adaptation. Previous literature has summarized the options available to individual producers. This overview extends the literature by including sector-level response as well as the relationships between adaptation and mitigation activities. Show less

Abstract
The Renewable Fuel Standard (RFS2), as implemented, has introduced uncertainty into US ethanol producers and the supporting commodity market. First, the fixed mandate for what is mainly cornstarch-based ethanol has increased feedstock price volatility and exerts a general effect across the agricultural sector. Second, the large discrepancy between the original Energy Independence and Security Act (EISA) intentions and the actual RFS2 implementation for some fuel classes has… Show more

Abstract
The Renewable Fuel Standard (RFS2), as implemented, has introduced uncertainty into US ethanol producers and the supporting commodity market. First, the fixed mandate for what is mainly cornstarch-based ethanol has increased feedstock price volatility and exerts a general effect across the agricultural sector. Second, the large discrepancy between the original Energy Independence and Security Act (EISA) intentions and the actual RFS2 implementation for some fuel classes has increased the investment uncertainty facing investors in biofuel production, distribution, and consumption. Here we discuss and analyze the sources of uncertainty and evaluate the effect of potential RFS2 adjustments as they influence these uncertainties. This includes the use of a flexible, production dependent mandate on corn starch ethanol. We find that a flexible mandate on cornstarch ethanol relaxed during drought could significantly reduce commodity price spikes and alleviate the decline of livestock production in cases of feedstock production shortfalls, but it would increase the risk for ethanol investors. Show less

ISBN 9781498778930 - CAT# K29842

Climate change is occurring. Deviations from historic temperatures and precipitation plus increased frequency of extreme events are modifying agriculture systems globally. Adapting agricultural management practices offers a way to lessen the effects or exploit opportunities. Herein many aspects of the adaptation issue are discussed, including needs, strategies, observed actions, benefits, economic analysis approaches, role of public/private actors, limits, and project evaluation. We comment on… Show more

Climate change is occurring. Deviations from historic temperatures and precipitation plus increased frequency of extreme events are modifying agriculture systems globally. Adapting agricultural management practices offers a way to lessen the effects or exploit opportunities. Herein many aspects of the adaptation issue are discussed, including needs, strategies, observed actions, benefits, economic analysis approaches, role of public/private actors, limits, and project evaluation. We comment on the benefits and shortcomings of analytical methods and suggested economic efforts. Economists need to play a role in such diverse matters as projecting adaptation needs, designing adaptation incentives, and evaluating projects to ensure efficiency and effectiveness. Show less

Background: The Mediterranean-style diet (MedDiet) is an established healthy-eating behavior that has consistently been shown to favorably impact cardiovascular health, thus likely improving quality of life and reducing costs associated with cardiovascular disease (CVD). Data on the economic benefits of MedDiet intakes are, however, scarce.

Objective: The objective of this study was to estimate the annual healthcare and societal cost savings that would accrue to the Canadian and American… Show more

Background: The Mediterranean-style diet (MedDiet) is an established healthy-eating behavior that has consistently been shown to favorably impact cardiovascular health, thus likely improving quality of life and reducing costs associated with cardiovascular disease (CVD). Data on the economic benefits of MedDiet intakes are, however, scarce.

Objective: The objective of this study was to estimate the annual healthcare and societal cost savings that would accrue to the Canadian and American public, independently, as a result of a reduction in the incidence of CVD following adherence to a MedDiet.

Design: A variation in cost-of-illness analysis entailing three stages of estimations was developed to 1) identify the proportion of individuals who are likely to adopt a MedDiet in North America, 2) assess the impact of the MedDiet intake on CVD incidence reduction, and 3) impute the potential savings in costs associated with healthcare and productivity following the estimated CVD reduction. To account for the uncertainty factor, a sensitivity analysis of four scenarios, including ideal, optimistic, pessimistic, and very-pessimistic assumptions, was implemented within each of these stages.

Results: Significant improvements in CVD-related costs were evident with varying MedDiet adoption and CVD reduction rates. Specifically, CAD $41.9 million to 2.5 billion in Canada and US $1.0–62.8 billion in the United States were estimated to accrue as total annual savings in economic costs, given the ‘very-pessimistic’ through ‘ideal’ scenarios.

Conclusions: Closer adherence to dietary behaviors that are consistent with the principles of the MedDiet is expected to contribute to a reduction in the monetary burdens of CVD in Canada, the United States, and possibly other parts of the world. Show less

The dual forces of population growth and climate change will exacerbate pressures on land use, water access, and food security.