Food for Fuel: The Effect of U.S. Energy Policy on Indian Poverty

摘要: Many countries have adopted energy policies that promote biofuels as a substitute for gasoline in transportation. For instance, more than 40% of U.S. grain is now used and this share expected to rise under the current Renewable Fuels Mandate. This paper examines distributional effects mandate on India using micro-level survey data. First, we use model with endogenous land estimate effect biofuel policy world price selected food commodities - rice, wheat, sugar meat dairy, which together provide almost 70% Indian calories. Their prices are predicted increase between 5% 11%. Uncertainty parameters incorporated Monte Carlo techniques generate standard errors these predictions. The increases household welfare then estimated data consumption wage incomes. We pass-through elasticities from time-series compute negative positive impacts perfect imperfect domestic prices. Under pass-through, leads reduction rural poverty by about 39 million people, an number urban poor 4 people. both total 8 Our study suggests US may lead modest prices, but sizable global impacts, differ across households.