Abstract
In the last decade, increased environmental awareness has prompted the adoption of incentives for exploiting renewable energy sources. Among these, biogas production has received a certain attention in developed countries. Nonetheless, the subsidies provided have posed the problem of an activity (the production of bioenergy) that engages in direct competition with food and feed production for limited resources, like agricultural land. Even if this competition may be softened by allocating marginal land and/or using dedicated non-agricultural crops, empirical evidence shows that biogas plants have been developed in highly-productive agricultural areas, using increasing amounts of maize silage as feedstock. Thus, studies aimed at measuring the effect of biogas production on agricultural activities are needed in order to avoid this socially undesirable outcome. The paper presents an econometric estimation of the impact of biogas plants on farmland rental values of a Northern Italian rural area. Results show that biogas has a non-linear effect on rental prices, suggesting that incentive schemes specifically accounting for plants’ dimensions and technologies would improve the social sustainability of the bioenergy sector and its coexistence with agricultural activity.
Highlights
Increased environmental awareness, both in public opinion and in governments of many countries, has prompted, over the last decades, the adoption of incentives for exploiting renewable energy sources.Among these, the production of energy from agricultural products, such as biomass and biofuels, generally termed as bio-energies, has received a certain attention in developed countries
The findings that come from different data and econometric models suffer for repeatability and cannot be formally confirmed
The present paper focused on the relationship between land rental prices and biogas production
Summary
Both in public opinion and in governments of many countries, has prompted, over the last decades, the adoption of incentives for exploiting renewable energy sources.Among these, the production of energy from agricultural products, such as biomass and biofuels, generally termed as bio-energies, has received a certain attention in developed countries. The subsidies provided to foster such productions have raised concerns for many reasons: for their cost, compared to employment and welfare gains [1], and for the potential competition with traditional allocations of farmland, devoted to food and feed production The latter aspect, named as the “food, energy and environment trilemma” [2], poses the problem of a further activity (the production of energy) that engages in direct competition with food and feed production for limited resources like water and agricultural land. As the latter is a fixed, non-renewable factor of production, it is plausible that such competition affects primarily on its allocation and, on food prices In this context, the subsidization provided for bioenergy has changed the relative convenience among alternative uses of agricultural land, increasing the relative profitability of crops for energy purposes. Even if this competition may be softened by allocating marginal land
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