Modelling Land Use Changes in a Global CGE: Assessing the EU biofuel mandates with the MIRAGE-BioF model

Evaluation of indirect land use changes due to biofuels has been very controversial over the past few years, as doubt has arisen about the potential benefits of growing crops for use as a substitute for fossil fuels. In this paper, we present an overview of a CGE modelling approach, based on the MIRAGE-BioF model. Our framework brings new innovative features that strengthen the relevance of the methodology. In particular, a more detailed and consistent database has been developed to represent the sectors and substitution mechanism at play. Moreover, the model used has been improved in several important ways to better reproduce agricultural supply function and land use change. However, we also emphasize the critical uncertainties that prevent us from being able to provide a precise two-digit figure on the extent of land use change and associated emissions. We illustrate these efforts with the case of EU biofuel mandates implications. We show that emissions from the current national targets in the EU could lead to an indirect effect of land use expansion ranging from 1 ha per TJ consumed to 12 ha per TJ with a median value of 3.4 ha per TJ. The associated emissions in a 20-year period would range from 10 gCO2/MJ to 115 gCO2/MJ, with a median value of 38 gCO2/MJ. These results seriously question the sustainability of the current EU biofuels policy and emphasize the even more dramatic effect of a biodiesel-oriented EU biofuel program, found to emit two times more than an EU ethanol-oriented program.