Assessing the effect of oil price on world food prices: Application of principal component analysis

The objective of this paper is to investigate the co-movement of food prices and the macroeconomic index, especially the oil price, by principal component analysis to further understand the influence of the macroeconomic index on food prices. We examined the food prices of seven major products: eggs, meat, milk, oilseeds, rice, sugar and wheat. The macroeconomic variables studied were crude oil prices, consumer price indexes, food production indexes and GDP around the world between 1961 and 2005. We use the Scree test and the proportion of variance method for determining the optimal number of common factors. The correlation coefficient between the extracted principal component and the macroeconomic index varies between 0.87 for the world GDP and 0.36 for the consumer price index. We find the food production index has the greatest influence on the macroeconomic index and that the oil price index has an influence on the food production index. Consequently, crude oil prices have an indirect effect on food prices.     

The price for biofuels sustainability

The production and usage of biofuels has increased worldwide, seeking goals of energy security, low-carbon energy and rural development. As biofuels trade increased, the European Union introduced sustainability regulations in an attempt to reduce the risks associated with biofuels. Producers were then confronted with costs of sustainability certification, in order to access the EU market. Hopes were that sustainably-produced biofuels would be rewarded with higher prices in the EU. Based on a review of recent literature, interviews with traders and price data from Platts, this paper explores whether sustainability premiums emerged and if so, did they represent an attracting feature in the market for sustainable biofuels. This article finds that premiums for ethanol and biodiesel evolved differently between 2011 and 2012, but have been in general very small or inexistent, with certified fuels becoming the new norm in the market. For different reasons, there has been an apparent convergence between biofuel policies in the EU and the US. As market operators perceive a long-term trend for full certification in the biofuels market, producers in developing countries are likely to face additional challenges in terms of finance and capacity to cope with the sustainability requirements.     

Impact of biofuel production and other supply and demand factors on food price increases in 2008

The prices of some grain commodities more than doubled from March 2007 to March 2008. Increased food prices coincided with increasing global biofuel production, leading to speculation that biofuel production was responsible for the increased food prices. However, over the six-month period after March 2008, grain prices declined by 50% while biofuel production continued to increase. It is not possible to reconcile claims that biofuel production was the major factor driving food price increases in 2007-2008 with the decrease in food prices and increase in biofuel production since mid-2008. The available data suggests that record grain prices in 2008 were not caused by increased biofuel production, but were actually the result of a speculative bubble related to high petroleum prices, a weak US dollar, and increased volatility due to commodity index fund investments.Many factors converged in 2007-2008 to increase food and related commodity prices including increased demand, decreased supply, and increased production costs driven by higher energy and fertilizer costs. Disentangling these factors and providing a precise quantification of their contributions is a difficult, perhaps impossible, task. In 2008, several reports were published by governmental and international agencies that speculated on the cause of increased food prices worldwide. Taken together, the available analyses suggest that biofuel production had a modest (3-30%) contribution to the increase in commodity food prices observed up to mid-2008. The development of second-generation biofuels (e.g., cellulosic ethanol) which use non-food residual biomass or non-food crops should mitigate any future impact of biofuel production on food prices.     

Quantifying the causes of the global food commodity price crisis

The food commodity price inflation beginning in 2001 and culminating in the food crisis of 2007/08, and which returned in 2010, reflects a combination of several factors including economic growth, biofuel expansion, exchange rate fluctuations, and energy price inflation. To quantify these influence we developed an empirical model that also included crop inventory adjustments, a factor that is underemphasized in the literature. The study shows that, if inventory effects are not taken into account, the impacts of the various factors on food commodity price inflation would be overestimated. Although our model explains most of the price fluctuation observed in 2001–2011, it is not able to explain all of it. Other factors, such as speculation, trade policy and weather shocks, which are not included in the analysis, might be responsible for the remaining contribution to the food commodity price increase.     

Land use competition for production of food and liquid biofuels: An analysis of the arguments in the current debate

This article analyses the current state of the debate over competition for land use, by means of an index of the main arguments in favor and against the production of liquid biofuels and the impacts on food production. Based on this index, an analytic framework is constructed to establish the causal relations indicated by the existing studies on this competition. We find that the emergence of agro-energy has altered the land use dynamic, albeit not yet significantly, with a shift of areas traditionally used to grow foods over to crops to produce biofuels. This has been contributing to raise food prices in the short run. However, it is probable that this is not the only factor determining this trend, nor will it last over the long run. The challenge is to conciliate the production of biofuels with the production of foods in sustainable form.     

Four myths surrounding U.S. biofuels

The rapid growth of biofuels has elicited claims and predictions concerning the current and future role of these fuels in the U.S. vehicle-fuel portfolio. These assertions are at times based on a false set of assumptions concerning the biofuel's market related to the petroleum and agricultural commodities markets, and the nonmarket consequences of our automobile driving. As an aid in clarifying these market relations, the following four biofuel myths are presented: (1) biofuels will be adopted because we will soon run out of oil, (2) biofuels will solve the major external costs associated with our automobile driving, (3) biofuels cause food price inflation (the food before fuel issue), and (4) biofuels will become a major vehicle fuel.     

Biofuels versus food production: Does biofuels production increase food prices?

Rapidly growing fossil energy consumption in the transport sector in the last two centuries caused problems such as increasing greenhouse gas emissions, growing energy dependency and supply insecurity. One approach to solve these problems could be to increase the use of biofuels.Preferred feedstocks for current 1st generation biofuels production are corn, wheat, sugarcane, soybean, rapeseed and sunflowers. The major problem is that these feedstocks are also used for food and feed production.The core objective of this paper is to investigate whether the recent increase of biofuels production had a significant impact on the development of agricultural commodity (feedstock) prices. The most important impact factors like biofuels production, land use, yields, feedstock and crude oil prices are analysed.The major conclusions of this analysis are: In recent years the share of bioenergy-based fuels has increased moderately, but continuously, and so did feedstock production, as well as yields. So far, no significant impact of biofuels production on feedstock prices can be observed. Hence, a co-existence of biofuel and food production seems possible especially for 2nd generation biofuels. However, sustainability criteria should be seriously considered. But even if all crops, forests and grasslands currently not used were used for biofuels production it would be impossible to substitute all fossil fuels used today in transport.     

Climate changes,biofuels and the sustainable future

Climate change is one of the most dangerous problems of the contemporary world. We can either adapt to the corresponding changes or try to reduce their impact by significantly reducing fossil fuel burning. A hydrogen-based economy using energy from biomass, solar, wind and other renewable sources and/or nuclear energy seems to be a viable alternative. Here we analyse the possibilities of the biofuels to replace fossil fuels and their potential to contribute to hydrogen economy.     

Oil price and inflation

An oil price rise would be expected to result in an immediate reduction by about 20% in the standard of living of the oil importing countries and a corresponding increase in that of the oil exporters. Since the price rises experienced during recent years have not been reflected in wage reductions, the result has been high, long-lasting inflation, which this paper shows will increase in the coming years to more than 20%. Measures taken by the oil importers include energy saving, which results in a still lower standard of living. If, instead, the industrialized countries increase production by increasing energy consumption and improving production efficiency, the effect of a rise in oil price will be compensated for in a few years.     

Lessons from first generation biofuels and implications for the sustainability appraisal of second generation biofuels

AimsThe emergence of second generation (2G) biofuels is widely seen as a sustainable response to the increasing controversy surrounding the first generation (1G). Yet, sustainability credentials of 2G biofuels are also being questioned. Drawing on work in Science and Technology Studies, we argue that controversies help focus attention on key, often value-related questions that need to be posed to address broader societal concerns. This paper examines lessons drawn from the 1G controversy to assess implications for the sustainability appraisal of 2G biofuels.ScopeWe present an overview of key 1G sustainability challenges, assess their relevance for 2G, and highlight the challenges for policy in managing the transition. We address limitations of existing sustainability assessments by exploring where challenges might emerge across the whole system of bioenergy and the wider context of the social system in which bioenergy research and policy are done.ConclusionsKey lessons arising from 1G are potentially relevant to the sustainability appraisal of 2G biofuels depending on the particular circumstances or conditions under which 2G is introduced. We conclude that sustainability challenges commonly categorised as either economic, environmental or social are, in reality, more complexly interconnected (so that an artificial separation of these categories is problematic).     

Oil exploitation and the environmental Kuznets curve

This study refers to a panel estimation of an environmental Kuznets curve (EKC) for oil to determine the factors most affecting oil exploitation in 38 oil-producing countries during 1990–2000. Control variables such as oil reserves, oil price, population, political rights, and the Gini index were used to determine its contribution to the main EKC model. The empirical results fully support the existence of an EKC for oil exploitation. Furthermore, the result indicates that the proved oil reserves has a significant and positive role in oil production, but oil price and population do not significantly affect crude oil production. Also, increased freedoms and a better income distribution will reduce the rate of oil exploitation. Thus, policies aiming at enhancing democratic society and better income distribution would be more compatible with sustainability.     

Public acceptance of biofuels

The public acceptance of biofuels in Greece is examined in this work. The analysis of 571 face to face interviews shows that 90.7% of the respondents believe that climatic changes are related to fossil fuel consumption, while only 23.8% know the difference between biodiesel and bioethanol. 76.1% believe that energy saving should precede the use of an alternative source of energy. Only 27.3% believe that priority must be given to biofuels over other renewable energy sources. Only 49.9% think that the use of biofuels can be an effective solution against climatic changes and 53.9% believe that the use of biofuels can be an effective solution for the energy problem. Finally, 80.9% of the car owners are willing to use biofuels, 44.8% are willing to pay the supplementary amount of 0.06 €/L of the fuel market price, while the average amount reported as willing to pay was 0.079 €/L on top of the fuel market price. Furthermore, eight models correlating the eight main responses with several socioeconomic variables are developed and analyzed. Those findings heave important policy implications related to the use and promotion of biofuels.     

2011年国际原油价格分析与趋势预测

2010年国际油价继续保持后金融危机时代的反弹并震荡上行总体态势,而且年内呈现出明显的先升后降再反弹的模式,季节性特征凸显。在分析油价主要影响因素的变动趋势之后,本文认为2011年国际油价波动主要取决于全球经济复苏的步伐和美元汇率的走势;预计2011年全球原油供需总体平衡或稍趋紧,基本面支持油价上升。在全球经济缓慢上升,世界政局相对平稳的情况下,2011年国际原油平均价格应该会超过2010年的水平,增至85～95美元/桶之间,实际油价将围绕平均价格宽幅震荡,呈现出明显的季节性波动特征。     

External governance and the EU policy for sustainable biofuels,the case of Mozambique

Growing demand for transport biofuels in the EU is driving an expansion of the industry in developing countries. Large-scale production of energy crops for biofuel, if mismanaged, could cause detrimental environmental and social impacts. The aim of this study is to examine whether the newly adopted EU Directive 2009/28/EC and its sustainability certification system can effectively ensure sustainable production of biofuels outside the EU. Mozambique, a least developed country with biofuels ambitions, is selected as empirical case. The effectiveness of the EU policy in analysed employing ideal models of external governance (hierarchical, market and network governance) as analytical framework. The findings show that the EU attempts to impose its rules and values on sustainable biofuels using its leverage through trade. The market approach adopted by the EU is expected to produce only unstable (subject to abrupt changes of market prices and demand) and thin (limited to climate and biodiversity issues) policy results. Stronger emphasis on a network oriented approach based on substantial involvement of foreign actors, and on international policy legitimacy is suggested as a way forward.     

Are biofuels a feasible option?

Recently a number of objections have been raised against the use of ethanol produced from agricultural products such as maize, sugarcane, wheat or sugar beets as a replacement for gasoline, despite some of their advantages such as being cleaner and to some extent renewable. We address these objections in this paper. Topics discussed include the “corn connection” (which was theorized to be a cause of deforestation in the Amazonia), the rise of food prices due to ethanol production and the real possibilities of ethanol in reducing greenhouse gas emissions. It has been shown that such concerns are grossly exaggerated and that ethanol from sugarcane, as produced in Brazil, is the preferred option for the production of fuel not only in terms of cost but also as a favourable energy balance. Finally, the possibility of expanding ethanol production to other sugar-producing countries is also discussed.     

Stakeholder perceptions of biofuels from microalgae

In this paper we focus on stakeholder views around the development of advanced biofuels from microalgae. Research for the development of microalgal-derived biofuels was initiated by the US Department of Energy (DOE) more than 30 years ago. However, interest in this eco-innovation has been growing significantly over the last five years in various countries. The high productivity of algae indicates that algal biofuels could contribute to reduce our dependence on fossil fuels while avoiding the undesired impacts of first generation biofuels. There are still numerous challenges that need nevertheless to be addressed. The aim of this paper is to explore stakeholder perceptions of the current barriers and opportunities associated with this promising emergent technology.     

Recent oil price shock and Tunisian economy

The objective of this paper is to study the oil prices–macroeconomy relationship by the analysis of the role of subsidy policy. The vector autoregression (VAR) method was employed to analyze the data over the period 1993 Q1 2007 Q3. The results of the model using both linear and non-linear specifications indicate that there is no direct impact of oil price shock on the economic activity. The shock of oil prices affects economic activity indirectly. The most significant channel by which the effects of the shock are transmitted is the government's spending.     

Oil trends and prices in the next decade: An aggregate analysis

In 1973 the OECD required about 0.5 tonnes of oil for the production of $1000 of output. Ten years after, in 1983, for the production of output, the requirements for oil had dropped to slightly over 0.3 tonnes. This dramatic decline in the oil intensity of the OECD economy has led to a new era of oil oversupply, marked by soft oil prices and uncertainty about the future market for petroleum products.     

Forecast of oil price and consumption in the short term under three scenarios: Parabolic,linear and chaotic behaviour

The paper examines the evolution of price and consumption of oil in the last decades to construct a relationship between them. Then the work considers three possible scenarios of oil price: parabolic, linear and chaotic behaviour, to predict the evolution of price and consumption of oil up to December 2003.