Macroeconomic impacts of bioenergy production on surplus agricultural land: a case study of Argentina

Abstract

This paper assesses the macroeconomic impacts in terms of GDP, trade balance and employment of large-scale bioenergy production on surplus agricultural land. An input–output model is developed with which the direct, indirect and induced macroeconomic impacts of bioenergy production and agricultural intensification, which is needed to make agricultural land become available for bioenergy production, are assessed following a scenario approach. The methodology is applied to a case study of Argentina. The results of this study reveal that large-scale pellet production in 2015 would directly increase GDP by 4%, imports by 10% and employment by 6% over the reference situation in 2001. When accounting for indirect and induced impacts, GDP increases by 18%, imports by 20% and employment by 26% compared to 2001. Agricultural intensification reduces but does not negate these positive impacts of bioenergy production. Accounting for agricultural intensification, the increase in GDP as a result of bioenergy production on surplus agricultural land would amount to 16%, 20% in imports and 16% in employment compared to 2001.