Interactions between agricultural, wood and energy markets

Background and Objective

In light of scarce fossil resources, policy makers increasinly rely on energy from biomass.  Currently, energy from biomass is hardly competetive without public support and is produced to a very limited extent.This may change when fossil energy becomes more expensive.

Our analysis show the impact of high energy prices and changing policies on national and global agricultural and forestry markets.

Approach

The working group brings research activities from four Thünen institutes together. The adaption of the economic models representing the agricultural and forestry sector are core to the group´s work. Priorities of work are the representation of biogas and corn for energy purposes, land markets, demand for wood for energy production, green hous gas emissions and other sustainability criteria.

Data and Methods

Centrepiece of the work are the quantitative models of the Thünen instutes for agricultural and forestry economics. This includes FARMIS, RAUMIS, MAGNET and GFPM. Scenarios describing different developments of energy prices and economic growth will help to analyse their impact on agriculture and forestry.

Results

• Our work has shown that about twelve percent of the arable land in Germany is currently used for the production of plants dedicated to biogas production.

• Scenario results indicate that increasing energy prices predominantly increase the demand for corn, sugar cane and sugar beet for biofuel production.

• Competition between fast-growing  plantations for firewood production and agricultural activities are to be expected particularly in Brandenburg and south of the Danube.