Chapter 6: Modelling Stakeholders’ Interplay and Policy Scenarios for Biorefinery Implementation

This chapter is structured in two parts dealing with the very same problem – that is, assessing and modelling stakeholder interplay and policy scenarios forthe development of biorefineries and biodiesel production. They target, however, the problem from two distinct perspectives: micro and macro.

The first part of the chapter presents the micro-economic perspective, assessing the methodological approach for policy modelling and policy evaluation. This investigation builds on the multi-level approach (MLA) for the study of technological trajectories. MLA should be conceived as a nested framework formed by linked levels: socio-technical regime, socio-technical landscape and innovation niches. Within such a framework, we focus our attention on the innovation niche and its emerging process. This is done by a three-step methodology. The first step aims at assessing the niche development status and makes use of Social Network Analysis and Fuzzy Cognitive Maps. In the second step we employ agent-based analysis for the development of an archetype model to investigating the key internal dynamics of the niche. The third step focuses on the evaluation of policy actions using a well-known criterion, that is the efficiency of the actions studied by means of the Data Envelopment Analysis.

In the second part of this chapter we turn to the macro-perspective, presenting a computable general equilibrium model. Here, we use counterfactual simulations to assess how consumer welfare is affected in the following cases: (1) a change in technology to comply with the European Union commitment to renewable energy use; (2) the implementation of different tax (or subsidy) rates on energy inputs and emissions, at either national or EU level; (3) a change in land-use, if biorefineries and biodiesel are considered as inputs to production.

Both the micro- and the macro-economic approaches are designed to respond to two key policy objectives: (1) to develop policy scenarios for biodiesel and biorefinery production through the analysis of social network interactions across stakeholders and consumer welfare; (2) to understand the evolution of various environmental, economic and policy constraints within a sustainable development framework for biofuel and biorefinery energy sectors.