An Economic Model of Brazil's Ethanol-Sugar Markets and Impacts of Fuel Policies
The lack of growth in the Brazilian sugarcane-ethanol complex since the 2008 financial crisis has been blamed on policies: lower mandate, holding gasoline prices below world levels, high fuel taxes, and inadequate fuel tax exemptions for ethanol. T...
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| Format: | Policy Research Working Paper |
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| Online Access: | http://documents.worldbank.org/curated/en/2013/06/17941690/economic-model-brazils-ethanol-sugar-markets-impacts-fuel-policies http://hdl.handle.net/10986/15882 |
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okr-10986-158822021-04-23T14:03:26Z An Economic Model of Brazil's Ethanol-Sugar Markets and Impacts of Fuel Policies de Gorter, Harry Drabik, Dusan Kliauga, Erika M. Timilsina, Govinda R. AGGREGATE DEMAND ALTERNATIVE ENERGY ALTERNATIVE ENERGY SOURCES ALTERNATIVE FUEL ANHYDROUS ETHANOL APPROACH BAGASSE BIOENERGY BIOFUEL BIOFUELS BIOMASS BOILERS CO COLLECTION COSTS COMMODITY PRICES COMPETITIVENESS CONSUMER PRICE CONSUMER PRICES CONSUMPTION OF FUEL CONVENTIONAL GASOLINE CORN CORN ETHANOL COST OF ETHANOL COST OF FEEDSTOCK COST OF SUGARCANE CRUDE OIL DEMAND CURVE DEMAND CURVES DEMAND FOR ETHANOL DEMAND FOR GASOLINE DEMAND FUNCTIONS ELECTRICITY ELECTRICITY COGENERATION ELECTRICITY GENERATION ELECTRICITY PRICES ELECTRICITY PRODUCTION ENERGY ECONOMICS ENERGY MARKETS ENERGY SOURCES ENVIRONMENTAL IMPACTS ETHANOL ETHANOL CONSUMPTION ETHANOL DEMAND ETHANOL FROM SUGARCANE ETHANOL FUEL ETHANOL INDUSTRY ETHANOL MARKET ETHANOL MARKET PRICES ETHANOL MARKETS ETHANOL PRICE ETHANOL PRICES ETHANOL PRODUCER ETHANOL PRODUCERS ETHANOL PRODUCTION ETHANOL PROGRAM ETHANOL YIELD ETHANOL YIELDS EXCESS ELECTRICITY EXPORT MARKET FEEDSTOCKS FREE MARKET FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL PRICE FUEL PRICES FUEL QUANTITIES FUEL TAX FUEL TAXES FUEL VOLUME GASOLINE GASOLINE CONSUMPTION GASOLINE EQUIVALENT GASOLINE MARKET GASOLINE PRICE GASOLINE PRICE INCREASES GASOLINE PRICES GASOLINE SUPPLY GASOLINE TAX GRAIN PRICES GREENHOUSE GAS HIGH ETHANOL HIGHER ETHANOL INFLATION INTERNATIONAL TRADE KILOWATT HOURS MARKET CONDITIONS MARKET DEMAND MARKET DEVELOPMENTS MARKET EQUILIBRIUM MARKET PRICE MARKET SHARE MARKETING MERCHANDISE NATURAL GAS OIL PRICES PETROLEUM PH PRICE CHANGE PRICE CHANGES PRICE DECREASE PRICE INCREASE PRICE LEVELS PRICE OF ELECTRICITY PRICE OF ETHANOL PRICE OF FUELS PRICE OF GASOLINE PRICE VOLATILITY PRODUCER PRICE PURCHASING QUANTITY OF FUEL RELEVANT MARKETS RETAIL SALES SOURCE OF ETHANOL SPOT PRICE SUGAR SUGAR CANE SUGARCANE SUGARCANE ETHANOL SUGARCANE PRODUCTION SUGARCANE-ETHANOL SUPPLIES OF ETHANOL SUPPLY CURVE SUPPLY CURVES SUPPLY ELASTICITY SUPPLY OF ELECTRICITY TAX BREAKS TAX CREDIT TAX CREDITS TAX EXEMPTION TAX EXEMPTIONS TRANSPORTATION FUEL TRANSPORTATION FUELS VEHICLE VEHICLES WHOLESALE GASOLINE WHOLESALE GASOLINE PRICE WHOLESALE PRICE WORLD MARKET flex-plant blend mandate The lack of growth in the Brazilian sugarcane-ethanol complex since the 2008 financial crisis has been blamed on policies: lower mandate, holding gasoline prices below world levels, high fuel taxes, and inadequate fuel tax exemptions for ethanol. This paper develops an empirical model of the Brazilian fuel-ethanol-sugar complex to analyze the impacts of these policies. Unlike biofuel mandates and tax exemptions elsewhere, Brazil's fuel-ethanol-sugar markets and fuel policies are unique such that each policy, in theory, has an ambiguous impact on the market price of ethanol and hence on sugarcane and sugar prices. The results indicate two policies that seemingly help the ethanol industry do otherwise in reality: low gasoline taxes and high anhydrous tax exemptions lower ethanol prices. But higher mandates, hydrous ethanol tax exemptions, and gasoline prices had the expected impact of increasing ethanol and sugar prices. Eliminating Brazilian ethanol tax exemptions and mandates reduces ethanol prices by 21 percent. Observed changes in prices are explained by outward shifts in fuel transportation and sugar export demand curves, and bad weather reducing sugarcane supply. 2013-09-26T19:22:54Z 2013-09-26T19:22:54Z 2013-06 http://documents.worldbank.org/curated/en/2013/06/17941690/economic-model-brazils-ethanol-sugar-markets-impacts-fuel-policies World Bank, Washington, DC http://hdl.handle.net/10986/15882 English en_US Policy Research Working Paper;No. 6524 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Brazil |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGGREGATE DEMAND ALTERNATIVE ENERGY ALTERNATIVE ENERGY SOURCES ALTERNATIVE FUEL ANHYDROUS ETHANOL APPROACH BAGASSE BIOENERGY BIOFUEL BIOFUELS BIOMASS BOILERS CO COLLECTION COSTS COMMODITY PRICES COMPETITIVENESS CONSUMER PRICE CONSUMER PRICES CONSUMPTION OF FUEL CONVENTIONAL GASOLINE CORN CORN ETHANOL COST OF ETHANOL COST OF FEEDSTOCK COST OF SUGARCANE CRUDE OIL DEMAND CURVE DEMAND CURVES DEMAND FOR ETHANOL DEMAND FOR GASOLINE DEMAND FUNCTIONS ELECTRICITY ELECTRICITY COGENERATION ELECTRICITY GENERATION ELECTRICITY PRICES ELECTRICITY PRODUCTION ENERGY ECONOMICS ENERGY MARKETS ENERGY SOURCES ENVIRONMENTAL IMPACTS ETHANOL ETHANOL CONSUMPTION ETHANOL DEMAND ETHANOL FROM SUGARCANE ETHANOL FUEL ETHANOL INDUSTRY ETHANOL MARKET ETHANOL MARKET PRICES ETHANOL MARKETS ETHANOL PRICE ETHANOL PRICES ETHANOL PRODUCER ETHANOL PRODUCERS ETHANOL PRODUCTION ETHANOL PROGRAM ETHANOL YIELD ETHANOL YIELDS EXCESS ELECTRICITY EXPORT MARKET FEEDSTOCKS FREE MARKET FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL PRICE FUEL PRICES FUEL QUANTITIES FUEL TAX FUEL TAXES FUEL VOLUME GASOLINE GASOLINE CONSUMPTION GASOLINE EQUIVALENT GASOLINE MARKET GASOLINE PRICE GASOLINE PRICE INCREASES GASOLINE PRICES GASOLINE SUPPLY GASOLINE TAX GRAIN PRICES GREENHOUSE GAS HIGH ETHANOL HIGHER ETHANOL INFLATION INTERNATIONAL TRADE KILOWATT HOURS MARKET CONDITIONS MARKET DEMAND MARKET DEVELOPMENTS MARKET EQUILIBRIUM MARKET PRICE MARKET SHARE MARKETING MERCHANDISE NATURAL GAS OIL PRICES PETROLEUM PH PRICE CHANGE PRICE CHANGES PRICE DECREASE PRICE INCREASE PRICE LEVELS PRICE OF ELECTRICITY PRICE OF ETHANOL PRICE OF FUELS PRICE OF GASOLINE PRICE VOLATILITY PRODUCER PRICE PURCHASING QUANTITY OF FUEL RELEVANT MARKETS RETAIL SALES SOURCE OF ETHANOL SPOT PRICE SUGAR SUGAR CANE SUGARCANE SUGARCANE ETHANOL SUGARCANE PRODUCTION SUGARCANE-ETHANOL SUPPLIES OF ETHANOL SUPPLY CURVE SUPPLY CURVES SUPPLY ELASTICITY SUPPLY OF ELECTRICITY TAX BREAKS TAX CREDIT TAX CREDITS TAX EXEMPTION TAX EXEMPTIONS TRANSPORTATION FUEL TRANSPORTATION FUELS VEHICLE VEHICLES WHOLESALE GASOLINE WHOLESALE GASOLINE PRICE WHOLESALE PRICE WORLD MARKET flex-plant blend mandate |
| spellingShingle |
AGGREGATE DEMAND ALTERNATIVE ENERGY ALTERNATIVE ENERGY SOURCES ALTERNATIVE FUEL ANHYDROUS ETHANOL APPROACH BAGASSE BIOENERGY BIOFUEL BIOFUELS BIOMASS BOILERS CO COLLECTION COSTS COMMODITY PRICES COMPETITIVENESS CONSUMER PRICE CONSUMER PRICES CONSUMPTION OF FUEL CONVENTIONAL GASOLINE CORN CORN ETHANOL COST OF ETHANOL COST OF FEEDSTOCK COST OF SUGARCANE CRUDE OIL DEMAND CURVE DEMAND CURVES DEMAND FOR ETHANOL DEMAND FOR GASOLINE DEMAND FUNCTIONS ELECTRICITY ELECTRICITY COGENERATION ELECTRICITY GENERATION ELECTRICITY PRICES ELECTRICITY PRODUCTION ENERGY ECONOMICS ENERGY MARKETS ENERGY SOURCES ENVIRONMENTAL IMPACTS ETHANOL ETHANOL CONSUMPTION ETHANOL DEMAND ETHANOL FROM SUGARCANE ETHANOL FUEL ETHANOL INDUSTRY ETHANOL MARKET ETHANOL MARKET PRICES ETHANOL MARKETS ETHANOL PRICE ETHANOL PRICES ETHANOL PRODUCER ETHANOL PRODUCERS ETHANOL PRODUCTION ETHANOL PROGRAM ETHANOL YIELD ETHANOL YIELDS EXCESS ELECTRICITY EXPORT MARKET FEEDSTOCKS FREE MARKET FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL PRICE FUEL PRICES FUEL QUANTITIES FUEL TAX FUEL TAXES FUEL VOLUME GASOLINE GASOLINE CONSUMPTION GASOLINE EQUIVALENT GASOLINE MARKET GASOLINE PRICE GASOLINE PRICE INCREASES GASOLINE PRICES GASOLINE SUPPLY GASOLINE TAX GRAIN PRICES GREENHOUSE GAS HIGH ETHANOL HIGHER ETHANOL INFLATION INTERNATIONAL TRADE KILOWATT HOURS MARKET CONDITIONS MARKET DEMAND MARKET DEVELOPMENTS MARKET EQUILIBRIUM MARKET PRICE MARKET SHARE MARKETING MERCHANDISE NATURAL GAS OIL PRICES PETROLEUM PH PRICE CHANGE PRICE CHANGES PRICE DECREASE PRICE INCREASE PRICE LEVELS PRICE OF ELECTRICITY PRICE OF ETHANOL PRICE OF FUELS PRICE OF GASOLINE PRICE VOLATILITY PRODUCER PRICE PURCHASING QUANTITY OF FUEL RELEVANT MARKETS RETAIL SALES SOURCE OF ETHANOL SPOT PRICE SUGAR SUGAR CANE SUGARCANE SUGARCANE ETHANOL SUGARCANE PRODUCTION SUGARCANE-ETHANOL SUPPLIES OF ETHANOL SUPPLY CURVE SUPPLY CURVES SUPPLY ELASTICITY SUPPLY OF ELECTRICITY TAX BREAKS TAX CREDIT TAX CREDITS TAX EXEMPTION TAX EXEMPTIONS TRANSPORTATION FUEL TRANSPORTATION FUELS VEHICLE VEHICLES WHOLESALE GASOLINE WHOLESALE GASOLINE PRICE WHOLESALE PRICE WORLD MARKET flex-plant blend mandate de Gorter, Harry Drabik, Dusan Kliauga, Erika M. Timilsina, Govinda R. An Economic Model of Brazil's Ethanol-Sugar Markets and Impacts of Fuel Policies |
| geographic_facet |
Latin America & Caribbean Brazil |
| relation |
Policy Research Working Paper;No. 6524 |
| description |
The lack of growth in the Brazilian
sugarcane-ethanol complex since the 2008 financial crisis
has been blamed on policies: lower mandate, holding gasoline
prices below world levels, high fuel taxes, and inadequate
fuel tax exemptions for ethanol. This paper develops an
empirical model of the Brazilian fuel-ethanol-sugar complex
to analyze the impacts of these policies. Unlike biofuel
mandates and tax exemptions elsewhere, Brazil's
fuel-ethanol-sugar markets and fuel policies are unique such
that each policy, in theory, has an ambiguous impact on the
market price of ethanol and hence on sugarcane and sugar
prices. The results indicate two policies that seemingly
help the ethanol industry do otherwise in reality: low
gasoline taxes and high anhydrous tax exemptions lower
ethanol prices. But higher mandates, hydrous ethanol tax
exemptions, and gasoline prices had the expected impact of
increasing ethanol and sugar prices. Eliminating Brazilian
ethanol tax exemptions and mandates reduces ethanol prices
by 21 percent. Observed changes in prices are explained by
outward shifts in fuel transportation and sugar export
demand curves, and bad weather reducing sugarcane supply. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
de Gorter, Harry Drabik, Dusan Kliauga, Erika M. Timilsina, Govinda R. |
| author_facet |
de Gorter, Harry Drabik, Dusan Kliauga, Erika M. Timilsina, Govinda R. |
| author_sort |
de Gorter, Harry |
| title |
An Economic Model of Brazil's Ethanol-Sugar Markets and Impacts of Fuel Policies |
| title_short |
An Economic Model of Brazil's Ethanol-Sugar Markets and Impacts of Fuel Policies |
| title_full |
An Economic Model of Brazil's Ethanol-Sugar Markets and Impacts of Fuel Policies |
| title_fullStr |
An Economic Model of Brazil's Ethanol-Sugar Markets and Impacts of Fuel Policies |
| title_full_unstemmed |
An Economic Model of Brazil's Ethanol-Sugar Markets and Impacts of Fuel Policies |
| title_sort |
economic model of brazil's ethanol-sugar markets and impacts of fuel policies |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2013/06/17941690/economic-model-brazils-ethanol-sugar-markets-impacts-fuel-policies http://hdl.handle.net/10986/15882 |
| _version_ |
1764431850954031104 |