Evaluation the potential economic impacts of Taiwanese biomass energy production Chi-Chung Chen a, *, Bruce McCarl b , Ching-Cheng Chang c , Chunto Tso d a Department of Applied Economics, National Chung-Hsing University, Taichung 402, Taiwan b Department of Agricultural Economics, Texas A&M University, College Station, TX 77843-2124, USA c Institute of Economics, Academia Sinica, Taipei, Taiwan d Taiwan Institute of Economic Research, Taiwan article info Article history: Received 15 September 2008 Received in revised form 27 December 2010 Accepted 4 January 2011 Available online 2 February 2011 Keywords: Bioenergy Ipomoea batatas Ethanol Agricultural sector model Energy sufficiency Greenhouse gases emission abstract The Taiwanese rice paddy land set-aside program diverts a substantial land area. Given today’s high energy prices and interests in energy security, that set-aside area could be converted to produce bioenergy feedstocks. This study evaluates the economic and envi- ronmental impacts of such a policy change using a Taiwanese agricultural sector model. The results show that such a strategy provides increased farm revenue, increased rural employment, increased energy sufficiency and reduced greenhouse gas emissions but also increased government expenditures. These outcomes indicate that the agricultural sector could play a positive role by producing renewable energy. ª 2011 Elsevier Ltd. All rights reserved. 1. Introduction Recently concerns and events regarding future fossil fuel abundance, energy security, petroleum prices and greenhouse gas emissions have led to a surge of interest in renewable fuels. In the U.S., circa 2000, biomass provided about 4% of the energy. Today policy is being directed toward increasing this dramatically with some advocating a liquid fuel market share of as much as 20%e35%. Europe is also displaying such interest. Hanegraaf et al. [1] estimate that in Europe 40 to 100 million hectares could be available beyond food crop production needs during the next few decades. Wood, energy crops, crop residues, processing byproducts and animal wastes are all potential biomass sources. Greenhouse gas (GHG) emission reduction efforts will likely also encourage renewable fuels. The 2007 Intergovern- mental Panel on Climate Change (IPCC) [2] reports a number of ways to manage emissions including bioenergy replacement of petroleum and or coal usage. In particular, bioenergy offers a potential way of reducing emissions by recycling carbon rather than emitting carbon geologically stored in fossil fuels. Taiwan has substantial carbon emissions and could have an interest to reduce these emissions. Chen [3] estimated that 1990 Taiwanese GHG emissions were 149 Mt carbon equiva- lent (CE) and would increase to 443 Mt CE by 2006. Almost 83% of these emissions were in the form of carbon dioxide largely from fossil fuel combustion in the form of coal and petroleum. This places Taiwan 24th among all countries. * Corresponding author. Tel.: þ886 4 22858137; fax: þ886 4 22860255. E-mail address: mayjune@nchu.edu.tw (C.-C. Chen). Available at www.sciencedirect.com http://www.elsevier.com/locate/biombioe biomass and bioenergy 35 (2011) 1693 e1701 0961-9534/$ e see front matter ª 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.biombioe.2011.01.004