Assessing Welfare and Growth Effects of Grain-based Fuel Ethanol Development in China: a General Equilibrium Framework

Abstract

In this study, we use the computable general equilibrium (CGE) model to examine welfare and growth effects of expanding grain-based fuel ethanol production in China. The results show that reasonable development of grain-based fuel ethanol will accelerate China’s economy, improve rural household income, and narrow the gap between the rich and the poor. However, expanding the production of grain-based fuel ethanol will also stimulate consumer price index (CPI).