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Impacts of Rising Production of Biofuels on Economy - Essay Example

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This essay discusses the influence of biofuel production on the amount of crops, produced by a country. It also analyzes the effects of increased competition between participants in the oil market and the impacts of rising biofuel demand on the price of oil and biofuel…
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Impacts of Rising Production of Biofuels on Economy
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?Introduction Biofuel involves reacting vegetable oils, animal facts catalytically with short chain aliphatic alcohols. Biofuel generation often leads to produce byproduct along original products including soaps, alcohol, glycerin, and trace amount of water. This study investigates the significance of microeconomics fundamental principles with respect to Biofuel production. Hence, the author of study is interested to determine production influence of Biofeul on corps. This study would analyze the effects of increased competition between participants in the oil market n the impacts of indentified Biofeul demand. Furthermore, this study would analyze the price influence of corps on single person income level. Part A Economic fundamental principle supports to the argument ‘Higher demand happens expensive products. However, Biofuel production would happen corn corps little expensive. Oil supply isn’t enough to fulfill daily oil consumption. Environmental concerned ones don’t feel snuggled by using natural oil. However, they prefer fuel for consumption containing lower carbon, CAFE & LCFS and greenhouse effect. Biofuel demand increases food supply, whereas joint demand of biofuel and food doubles than of individual demand. Hence, equilibrium sets little ahead from biofeul demand and food demand. Increased biofuel demand causes food prices higher & availability scarce. (OECD (2002). This graphical representation is showing the impact of biofuel prices on corps. However, it has been observed that increase in demand of biofuel is causing supplies of corps increased. Agricultural development & energy conversion techniques used to be helpful for controlling biofuel prices to some extent. For instance, agricultural development would help farmer to improve production. However, this would lead to increase supplies into market. Biofuel demand would be therefore reduced automatically. In addition, energy conversion techniques make biofuel generation inexpensive. Biofuel production caused food prices to hike by 16-40%. Eventually, research & development increases the chances to get lucrative agriculture production. Cotton and corn yields have much more relative to rice and food productivity. Biofeul production cannot be increased until unless massive land expansion and increased productivity. Agricultural development would make Biofuel’ s production little higher. However, farmers would be in a position to produce higher amount of corps. Biofuel demand would also be increased as it is better oil direct alternative of oil & gasoline. Oil market is direct competitor of Biofuel renewable energy. However, lower oil prices would put significant influence on biofuel price. In other case, if oil prices set at higher level. However, demand for biofuel would definitely get improved. Vehicle fuel consumption is increasing on daily basis. People therefore give importance to cheap energy sources. Today, farmers have been with improved agricultural and conversion productivity. Eventually, higher energy prices in the 2000s combined with subsidies and low food prices made biofuel profitable. Corn price is recently increased. Thereby, it lead to big losses to corn biofuel processors. Task B Consumer behavior has significant orientation with changing fuel preferences and corps prices. Vehicle technology hasn’t improved yet. However, natural oil is on large scale made base point for fuel consumption in engines. Consumer behavior has significant association with price fundamental concept. Income is inversely proportional to food prices. Whenever, food prices go up then one has to pay off little more for same things. Biofuel consumption would make people uneasy as food prices would be increased in the result of biofuel production. Natural oil is also vital reason besides higher prices. It directly impacts on transportation charges. However, farmers have to pay off big amount of their earnings in taxes. This makes them to charge end user little more amount. Eventually, this particular phenomena leads market trends to settle equilibrium little away from convenient level. Biofeul is unconditionally helpful for such people, who don’t earn enough to support their daily expenditures. Food prices wouldn’t increase with same proportionate of fuel prices. However, poor one can afford food at least. A person has higher income level, but he spends a bit on food items. Thereby, price level wouldn’t be higher. There is no as such demand available for food items. However, fuel prices wouldn’t be higher anymore. Corn save 18% GHG under reasonable conditions but that may change if more coal is used in processing. Similarly, sugarcane emits sufficient amount of oil, but it is significantly lesser than corn. Whenever land is expanded for enhancing production, it significantly causes the impact on fuel production. Consumer behavior has significant orientation with changing fuel preferences and corps prices. Vehicle technology hasn’t improved yet. However, natural oil is on large scale made base point for fuel consumption in engines. Consumer behavior has significant association with price fundamental concept. However, consumer always wants to spend less on the fulfillment of fuel needs. Biofuel can be effectively utilized until unless its processing gets cleaned. Furthermore, farmers must be educated about the ways to increase their productivity. Technology access is another valuable point for improving biofuel production. Farmers have to pay off big amount of their earnings in taxes. This makes them to charge end user little more amount. Eventually, this particular phenomena leads market trends to settle equilibrium little away from convenient level. Biofeul is unconditionally helpful for such people, who don’t earn enough to support their daily expenditures. Food prices wouldn’t increase with same proportionate of fuel prices. However, poor one can afford food at least. (Martin von Lampe (2007) Government policies should be crystal clear regarding price mechanism. Biofuel production is appreciating everywhere to encourage people to produce significant amount of renewable energy. This is not only helpful for meeting industrial challenges but also helpful for transportation. Oil market increases prices on daily basis. However, it is becoming difficult to drive vehicles on the road. In addition, poor individual has lost its financial strengths to bear expenditures. Similarly, rich ones have also cut down their purchasing to some specific level. Furthermore, government should encourage farmers to improve corn production. Government should put its officials to look after for biofuel production up to international standards. Conclusion This study has discussed the source of biofeul, which includes vegetable, animal facts, and short chain aliphatic alcohols. Biofeul factory process produces certain by products including soaps, alcohol, trade amount of water, and glycerin. Furthermore, this study has identified the influence of Biofeul on corps. This study has also investigated the price influence of corps particularly on income level of individual. The author of study has practically analyzed microeconomics models and concepts to the issues raised by biofeul. References OECD (2002), Agricultural Policies in OECD Countries: A Positive Reform Agenda, ISBN 978-92-64-19967-5, 40 pages. Martin von Lampe (2007), Economics and Agricultural Market Impacts of Growing Biofuel Production, Agrarwirtschaft, Heft 5/6. Read More
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