The role of natural resource and environmental economics in determining the trade-offs in consumption and production of energy inputs: The case of biomass energy crops

Natural resource economics issues deal with flows and funds of renewable and nonrenewable resources over time. These issues include topics concerned with management of fisheries, forests, mineral, energy resources, the extinction of species and the irreversibility of development over time. Environmental economics issues deal with regulation of polluting activities and the valuation of environmental amenities. In this study we outline a framework for studying both natural resource and environmental economics issues for any renewable or nonrenewable resource. Valuation from both the cost and benefit sides are addressed as they relate to the valuation of environmental programs or policies. By using this top-down approach to analyze and determine the costs and benefits of using renewable or nonrenewable resources, policy-makers on the global, national and local scales may be better informed as to the probable nonmarket and market ramifications of their natural resource and environmental policy decisions. The general framework for analysis is then focused to address biomass energy crops and their usage as inputs to energy production. As with any energy technology, a complete analysis must include an examination of the entire fuel cycle; specifically both production and consumption sides. From a production standpoint, market valuation issues such as crop management techniques, inputs to production, and community economics issues must be addressed as well as nonmarket valuation issues such as soil erosion, ground water effects and carbon sequestration. On the consumption side, market valuation considerations such as energy fuel efficiency and quality, cost of conversion and employment of labor are important factors while the critical nonmarket valuation factors are ambient air visibility, greenhouse gas release, and disposal of the by-products of conversion and combustion