Global Land Use Impacts of Bioeconomy: An Econometric Input-Output Approach

Many countries have set ambiguous targets for the development of a bioeconomy that not only ensures sufficient production of high-quality foods but also contributes to decarbonization, green jobs and reducing import dependency through biofuels and advanced biomaterials. However, feeding a growing and increasingly affluent world population and providing additional biomass for a future bioeconomy all within planetary boundaries constitute an enormous challenge for achieving the Sustainable Development Goals (SDG). Global economic models mapping the complex network of global supply such as multiregional input-output (MRIO) or computable general equilibrium (CGE) models have been the workhorses to monitor the past as well as possible future impacts of the bioeconomy. These approaches, however, have often been criticized for their relatively low amount of detail on agriculture and energy, or for their lack of an empirical base for the specification of agents' economic behavior. In this paper, we address these issues and present a hybrid macro-econometric model that combines a comprehensive mapping of the world economy with highly detailed submodules of agriculture and the energy sector in physical units based on FAO and IEA data. We showcase the model in a case study on the future global impacts of the EU's bioeconomy transformation and find small positive economic impacts at the cost of a considerable increase in land use mostly outside of Europe.

Automated summary

Many countries have set ambiguous targets for the development of bioeconomy. The challenge lies in meeting the demands of a growing and affluent population while staying within planetary boundaries and achieving the SDGs. Global economic models have been criticized for their lack of detail in agriculture and energy, as well as the empirical basis for economic behavior. This paper proposes a hybrid macro-econometric model that combines a comprehensive mapping of the world economy with detailed submodules for agriculture and energy.