Dissertation/Thesis Abstract

Impacts of renewable fuel regulation and production on agriculture, energy, and welfare
by McPhail, Lihong Lu, Ph.D., Iowa State University, 2010, 117; 3403859
Abstract (Summary)

The purpose of this dissertation is to study the impact of U.S. federal renewable fuel regulations on energy and agriculture commodity markets and welfare. We consider two federal ethanol policies: the Renewable Fuel Standard (RFS) contained in the Energy Security and Independence Act of 2007 and tax credits to ethanol blenders contained in the Food, Conservation, and Energy Act of 2008. My first essay estimates the distribution of short-run impacts of changing federal ethanol policies on U.S. energy prices, agricultural commodity prices, and welfare through a stochastic partial equilibrium model of U.S. corn, ethanol, and gasoline markets. My second essay focuses on studying the price behavior of the renewable fuel credit (RFC) market, which is the mechanism developed by the Environmental Protection Agency (EPA) to meet the RFS. RFCs are a tradable, bankable, and borrowable accounting mechanism to ensure that all obligated parties use a mandated level of renewable fuel. I first develop a conceptual framework to understand how the market works and then apply stochastic dynamic programming to simulate prices for RFCs, examine the sensitivity of prices to relevant shocks, and estimate RFC option premiums. My third essay assesses the impact of policy led U.S. ethanol on the markets of global crude oil and U.S. gasoline using a structural Vector Auto Regression model of global crude oil, U.S. gasoline and ethanol markets.

Indexing (document details)
Advisor: Babcock, Bruce A.
Commitee: Hayes, Dermot J., Hennessy, David A., Kling, Catherine L., Lence, Sergio
School: Iowa State University
Department: Economics
School Location: United States -- Iowa
Source: DAI-A 71/06, Dissertation Abstracts International
Source Type: DISSERTATION
Subjects: Economics, Agricultural economics, Energy
Keywords: Commodity markets, Equilibrium model, Renewable fuel credits, Renewable fuel policy, Stochastic simulation, Structural VAR
Publication Number: 3403859
ISBN: 9781109778014