Abstract
A Computable General Equilibrium (CGE) model has been developed and applied to Japan in order to analyze the economic impacts caused by the introduction of bioethanol produced from rice. Even though the analysis is done on a national level, the application of the model is regional. That is, Japan has been divided into nine geographical regions, and the model has been applied to each. For each region, a Social Accounting Matrix (SAM) has been prepared to be used as database for calibration of the model. Then, the introduction of bioethanol is simulated as a substitution of a fixed share of the petroleum sector using a penetration rate parameter. The model is then run for a wide range of this penetration rate parameter (from 5% to 100%) with the intention to cover all the common ethanol fuel mixtures. Results show that the major economic impact of the bioethanol introduction is on the rice sector, where the feedstock of the bioethanol comes from. This sector experiences an increase linearly proportional to the bioethanol penetration rate in its demand and price. Also, a negative economic impact on the food sector is observed, as it presents a decrease in its level of production due to the deviation of the rice now used to produce ethanol.
