A scenario based analysis of land competition between food and bioenergy production in the US

Greenhouse gas abatement policies will increase the demand for renewable sources of energy, including bioenergy. In combination with a global growing demand for food, this could lead to a food-fuel competition for bio-productive land. Proponents of bioenergy have suggested that energy crop plantations may be established on less productive land as a way of avoiding this potential food-fuel competition. However, many of these suggestions have been made without any underlying economic analysis. In this paper, we develop a long-term economic optimization model (LUCEA) of the U.S. agricultural and energy system to analyze this possible competition for land and to examine the link between carbon prices, the energy system dynamics and the effect of the land competition on food prices. Our results indicate that bioenergy plantations will be competitive on cropland already at carbon taxes about US $20/ton C. As the carbon tax increases, food prices more than double compared to the reference scenario in which there is no climate policy. Further, bioenergy plantations appropriate significant areas of both cropland and grazing land. In model runs where we have limited the amount of grazing land that can be used for bioenergy to what many analysts consider the upper limit, most of the bioenergy plantations are established on cropland. Under the assumption that more grazing land can be used, large areas of bioenergy plantations are established on grazing land, despite the fact that yields are assumed to be much lower (less than half) than on crop land. It should be noted that this allocation on grazing land takes place as a result of a competition between food and bioenergy production and not because of lack of it. The estimated increase in food prices is largely unaffected by how much grazing land can be used for bioenergy production.