Global Biofuel Production and Poverty in Senegal.
Abstract
Assessing the potential effects of a world biofuel boom on a non-oil producing economy like Senegal and on its households is relevant when it comes for policymakers to make a trade-off between fossil energy and biofuel. In this paper, we run a simulation, based on a dynamic, general equilibrium model for the period 2006-2020, to capture the effects of the boom of biofuel in the world market on growth and poverty in Senegal. Our results suggest that, due to decreasing prices, imports increase for crude oil, tradable services and non food industries. Valued-added of biodiesel and bioethanol decreases while it increases for most the sectors, in particular those which are more energy intensive. Poverty is quite constant for the first sub-period but it declines thereafter. The households living in urban areas experienced a more deep decrease in their poverty headcount than the one of rural areas.