“There could be quite a substantial increase in yield volatility, and that’s due to the increased frequency and intensity of the high temperatures throughout the Corn Belt,” Thomas Hertel, a Purdue distinguished professor of agricultural economics, said in a statement. “Closer integration of the corn and energy markets through the ethanol industry could aid in buffering these shocks, but this would not occur in the presence of a mandate.”
Mandates for biofuels were first introduced in the Energy Policy Act of 2005, which instituted a renewable fuels standard (RFS) requiring refiners to blend increasing amounts of biofuel into gasoline. The Energy Independence and Security Act of 2007 extended and enlarged the RFS, mandating 36 billion gallons of biofuels by 2022.
Noah Diffenbaugh, assistant professor of earth sciences at Stanford University, who with Hertel co-authored the report published recently in the journal Nature, said in statement: ”We find that even one or two degrees of global warming is likely to increase heat waves enough to cause much higher frequency of low-yield years, leading to greater volatility of corn prices.”
Hertel and Diffenbaugh’s research was funded by the U.S. Department of Energy’s Office of Science.
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