Biofuel : impact on global economy.

Fossil fuels have been our main source of energy. However, they are non-renewable, meaning they will deplete one day. Coupled with the severe environmental damage caused by the burning of fossil fuels, alternative energy sources have to be discovered. In this paper, we present and examine the impacts of biofuel production on the global economy. This will be evaluated through three aspects – economic, environmental, and social. U.S. and Brazil are the 2 main producers of ethanol, accounting for 90 per cent of world production. The biofuel industry contributes to Gross Domestic Product (GDP) growth by increasing energy supply, mitigates carbon dioxide (CO2) emissions, but raising moral issues like creating bouts of food shortage. Some researchers advocate the use of biofuel, the others feel that biofuel is not as great as it seems. The key determinants of biofuel production used in our analysis are Gross National Income (GNI), agricultural land, share of renewable energy (SRE) out of total primary energy supply, CO2 emissions, and poverty rate. By using ordinary least squares (OLS) regression to examine these factors, we have found that all but SRE contribute significantly to production of biofuel.Bachelor of Art