Policy considerations for biomass commercialization and its impact on the Chariton Valley biomass project Page: 4 of 10
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BioEnergy '98: Expanding BioEnergy Partnerships
The Clean Air Act and numerous Farm Bills provide evidence of government action to
address environmental problems. Whether directly or indirectly, government policies do
cause economic adjustments. As a society we impose policy values that encourage or
discourage certain actions. Examples include U.S. energy policies that historically
provided incentives to develop fossil fuels such as coal and gasoline, and then more
recently, closely regulated emissions from coal-fired power plants. Likewise, incentives,
regulations and subsidies have driven U.S. agriculture since the 1930's, influencing
farmer decisions to produce crops and to conserve soil. These policy-based market
effects are both extensive and firmly entrenched in our economic system.
Therefore, a full accounting of the costs and benefits associated with both biomass and
coal, coupled with the publics' desire to protect the environment; could have policy
implications that improve the commercial potential of biomass. Policies that encourage
or require the use of biomass translate to market adjustments that can achieve the afore-
mentioned benefits and result in a cohesive merging of energy and agriculture policy.
Indeed, both the United States Departments of Agriculture and of Energy are
cooperatively assessing biomass technologies and their policy implications.
THE PRECEDENCE FOR BIOMASS POLICY INIATIVES
Current U.S. energy policy seeks to secure "a more efficient, less vulnerable, and
environmentally sustainable energy future (DOE, 1991). Specifically the Energy Policy
Act of 1992 (EPACT) required DOE to develop a least-cost national energy strategy that
considers the economic, energy, environmental, and social costs of various energy
technologies. In 1992, the U.S. Department of Energy (DOE) indicated that the
development of a sustainable biomass energy program in the U.S. was desirable for a
number of reasons (DOE, 1992). The use of dedicated energy crops was identified as a
major long-term source of renewable fuel to establish domestic energy independence,
address global warming, relieve over production in the agricultural sector, reduce water
pollution and increase rural incomes. Arguably, the intent of U.S. Energy policy is to
strongly consider environmental and other public impacts in the evaluation of total
energy production costs.
While environmental impacts or "externalities" are an unintended byproduct of energy
and agriculture production, they place significant costs on private individuals and the
public in general without any compensation (Baumol and Oates, 1979). A recent
comparison of coal and biomass suggests that with consideration of the extensive external
costs and benefits, biomass is competitive with coal. The two major factors in this
comparison are public costs to control non-point pollution and the potential to reduce
CO2 emissions (Faaij, 1997). It is also well recognized that when the marketplace does
not adequately capture these costs, government involvement is appropriate to implement
adjustment mechanisms (Miranoski, 1986; Tietenberg, 1996).
The 1963 Clean Air Act was the first attempt by the federal government to establish air
quality standards and set the precedence for environmental government intervention. The
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Cooper, J. Policy considerations for biomass commercialization and its impact on the Chariton Valley biomass project, article, December 31, 1998; United States. (digital.library.unt.edu/ark:/67531/metadc679994/m1/4/: accessed November 19, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.