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In the context of ever-increasing petroleum pricescombined with concerns about climate change, timing ofadoption and rate of diffusion of land-based fuels and backstoptechnologies for transportation use are examined in this paper.A global model of land allocation joined with a Hotellingmodel has been developed. Using this framework, effects ofclimate and energy policies on world agricultural and energymarkets have been explored. Further, their regional impactsare also analyzed. Whereas mandatory blending bio-fuels havesubstantial effects on world food prices and do not succeed incurbing down carbon emissions fluxes, carbon targets areexpected to speed up date of adoption of backstop technologies.Then, sensitivity scenarios with regards to technologicalparameters reveal that higher is the rate of technologicalchange, earlier backstop technologies are adopted and lower isthe stock of carbon accumulated into the atmosphere. Finally,interplay between land-based fuels and deforestation has beenstudied. Results show that land-based fuels production speedsup world deforestation and causes substantial carbonemissions due to conversion of forests into agricultural lands.
