A CGE Analysis On Impact Of The Bio-Fuel Development On Food Security And Endergy Security

To reduce the ascending energy price and solve the environmental problems arising by the emission of greenhouse gas, corn ethanol, as a clean energy is concerned by all of the countries over the world. On one side, corn ethanol, which exists as the substitute of traditional energy, can ease the pressure from energy security. On the other side, it will threaten food security, as its materials are mainly corn and wheat, which are also used as food and feed.Since 2000, China has commenced to develop the corn ethanol, and now it becomes the world's third manufacturer. Truly, the development of corn ethanol is favorable to China's energy security, especially to meet the demand of petrol for cars. However, under the background of World's food crisis, its disadvantage to China's food security is more concerned. The government even chose to suspend its development in 2006. Therefore, the question is whether there is any possibility to develop corn ethanol in China.The thesis will analyze it from the angle of the comparison of the urgency between China's food security and energy security. By studying their lap between supply and demand, the world supply and the fluctuation tendency of China's import and world's production individually, it indicates that China has the ability to guarantee its food security, even under the background of world's food crisis. However, it is hard to ensure its energy security, as the world oil crisis really hinders its security. Therefore, energy security turns out to be more urgent in China now. So it is implied that there is still some space for the developing of corn ethanol.Then, what is the result of China's developing of corn ethanol? If the development is resumed, what will the further result to food security and energy security? The dissertation will illuminate it through the simulation by CGE model.To study the impact of the different stages of the developing of corn ethanol on food and feed security, energy security and welfare, we set two scenarios:One is the production of corn ethanol up to 1350 thousand tons, which is close to the reality in China now. The other is the production reaching 10000 thousand Tons, which is equal to the production of USA in 2006. According to the relationship between input and output, the impact of the developing of corn ethanol can be divided into two parts:One is brought by increasing the corn demand, and the other is from the increase of the oil supply. It is supposed that the impact of the developing of corn ethanol is equal to the sum of two parts.Through simulation, the conclusions are listed below:First, under the both scenarios, the developing of corn ethanol has little effect on the food security of other cereals, except corn, judging from the change of their prices, productions, sown areas, consumptions, trade values and world prices. Concerning corn, under the first scenario, the food security of corn will be worsening, as the price will be increased, and net import will also be enhanced. When the production is up to 10000 thousand tons, the food security can still be ensured. But the threat will be more severe. It can be referred that the food security of corn will be in danger if the production of corn ethanol continues to increase.Secondly, the development of corn ethanol will not effect the feed security, taking the production, consumption and price of meet and processed food for considerationThirdly, the development of corn ethanol has little impact on coal, gas and energy-intensive industry under the two scenarios. Concerning oil and petrol, the effects are bigger. But it still can't solve the energy crisis, but only release the demand of petrol for car.Moreover, considered China's total welfare, the development of corn ethanol will increase the household income, but reduce GDP value. Referred to the different sectors in our country, the producers in agriculture will benefit, while the consumers in agriculture will lose. The producers in industry will lose and at the meantime, the producers in service will benefit. As per different factors, the owners of land will benefit most. The owners of labor, no matter skilled or unskilled will also benefit from its development.The content of the 10th chapter will search a proper policy of corn ethanol's development, subject to the goal of food security and energy security. It is proved, the maximum of corn ethanol's production is up to 30000 thousand tons, if you want to ensure the food security. It is impossible to rely on corn ethanol to solve our oil crisis.According to the study, the suggestions are:Firstly, it is proved that China can enhance its production of corn ethanol considering the urgency of food security and energy crisis. But food security is so important in China that we have to find a proper policy for the development of corn ethanol, which is subject to food security. It is calculated the maximum of corn ethanol is 30000 thousand tons. Therefore, there is still some space for corn ethanol. Besides its development, we should build up a warning system to announce the situation of food security often.Secondly, to guarantee our energy security, it is not feasible to rely only on corn ethanol. Diesel oil is also a good choice for China.