Ethanol production under endogenous crop prices: Theoretical analysis and application to barley

► Social desirability of ethanol production from agricultural crops is examined under endopgenous crop price and life cycle greenhouse gas emissions. ► Ethanol production is socially desirable under current ethanol price but only if the side products, animal feed and the straw for energy, are produced. ► Returns to barley-ethanol depend on the 'side products' and CO2 -eq emissions in cultivation. ► Relative to corn-ethanol, offsets by straw in CHP production improve the case for barley-ethanol.