Resource information
Argentina is one of the world's
largest biodiesel producers and the largest exporter, using
soybeans as feedstock. Using a computable general
equilibrium model that explicitly represents the biofuel
industry, this study carries out several simulations on two
sets of issues: (i) international markets for biofuel and
feedstock, such as an increase in prices of soybean, soybean
oil, and biodiesel, and (ii) domestic policies related to
biofuels, such as an introduction of biofuel mandates. Both
sets of issues can have important consequences to the
Argentinean economy. The simulations indicate that increases
in international prices of biofuels and feedstocks would
increase Argentina's gross domestic product and social
welfare. Increases in international prices of ethanol and
corn also can benefit Argentina, but to a lesser extent. The
domestic mandates for biofuels, however, would cause small
losses in economic output and social welfare because they
divert part of biodiesel and feedstock from exports to
lower-return domestic consumption. An increase in the export
tax on either feedstock or biodiesel also would lead to a
reduction in gross domestic product and social welfare,
although government revenue would rise.
