A CGE Approach to the Analysis of Biofuels for Promoting Energy Self Sufficiency and Security Policy in Thailand–Results and Discussion

This paper applies a computable general equilibrium (CGE) model of the Thailand economy to analyse the government's recent renewable energy development plan. This plan aims to increase domestic energy use from renewable sources to replace fossil fuel imports. The study simulated specific policies contained in the plan. Among other things, we found that promoting biofuel use causes a rapid increase in the price of biofuel and biofuel feedstock in the short run, whereas these prices only increase slightly in the long run due to more elastic supplies. Furthermore, the prices of food including other products marginally increase, implying that food security is not undermined by the policy. On the basis of the findings, the study recommends review of some of the targets because they were found to be too high, and a phasing in of others.