Estimated cost of corn and sugarcane ethanol production in the US and Brazil Assumptions: Corn Feedstock Yield (Metric tons/Hectare) Ethanol Yield (Liters/Hectare) Sugarcane 10.05 4205.45 Corn Ethanol 75.18 6134.42 Sugarcane Ethanol in R$ Exchange Rate US$ R$ $/Ha R$/Ha $/Ha 2.00 $/Ha 3.00 Fertilizer cost Chemicals Seed Machinery, Repairs, Fuel, and Hire Transportation of feedstock to refinery gat 225.00 106.26 110.00 217.45 37.36 550.00 Cost of Land and Management 745.44 222.92 150.00 1475.77 502.50 182.04 275.00 111.46 75.00 737.88 251.25 91.02 183.33 74.31 50.00 491.92 167.50 60.68 Total Feedstock Cost Per Ha Feedstock Cost per Ton Feedstock Cost per L 1441.51 143.50 0.34 3083.23 41.01 0.50 1541.62 20.51 0.25 1027.74 13.67 0.17 0.15 0.03 0.18 0.43 0.10 0.02 0.12 0.29 0.06 0.35 1.32 Cost Items per Hectare Feedstock Production and Transportation Cost Refinery Cost Inputs Equipment Total Refinery Cost per liter Total Cost of Production (Coproduct Credit per L of Ethanol) Transport from Brazil to US Port Total Cost per L of Ethanol Total Cost per Gal of Ethanol $/Liter R$/Liter 0.16 0.03 0.30 0.06 0.19 0.36 0.531 0.867 -0.117 0.41 1.046 0.09 0.52 1.57 3.96 1.98 0.18 1a Suppose the corn ethanol yield increases to 6000 liters per hectare, what is the cost pe 1b What are the emissions in Kg CO2 per hectare from producing corn ethanol 1c What are the emissions in Kg CO2 per hectare from producing sugarcane ethanol 1d Suppose the corn ethanol yield increases to 6000 liters per hectare, what are the emis 1e If the energy content of ethanol relative to gasoline increases to 75% what is the cost 1f What is the external cost of gasoline per ethanol equivalent gallon in this case 1g What is the social cost of gasoline (private + external) in this case 1h How many million hectares of land are needed to produce 5 billion gallons of corn et 1i How many hectares of land are needed to produce 5 billion gallons of sugarcane etha 1j Suppose a consumer has a vehicle that gives 25 miles per gallon of gasoline (in gasol 1k What is the social cost (private +external) cost per mile of driving with gasoline 1l What is the private cost per mile of driving with corn ethanol when corn ethanol cost 1m What is the social cost per mile of driving with corn ethanol when corn ethanol costs 1n What is the private cost per mile of driving with sugarcane ethanol when sugarcane e 1o What is the social cost per mile of driving with sugarcane ethanol when sugarcane eth Sugarcane Seed Price R$ per ton Corn Seed Price $ per ton Fertilizer price $ per ton Fertilizer price R$ per ton Wholesale Cost of Gas $/gallon Sugarcane seed quantity per hectare Corn seed quantity per hectare Fertilizer quanity per hectare for corn Fertlizer quantity per hectare for sugarcane $15 $10 5 5 2 10 11 45 110 Energy content of ethanol relative to gasoline Cost of gasoline $ per gallon Cost of corn ethanol $ per gallo Cost of sugarcane ethanol $ per gallon (1$=2R$) Cost of sugarcane ethanol $ per gallon (1$=3R$) Emissions from gasoline Emissions from corn ethanol Emissions from sugarcane ethanol External Cost of Gasoline External Cost of Corn Ethanol External Cost of Sugarcane Ethanol Total Cost of gasoline (Private and External Cost) Total Cost of Corn Ethanol (Private and External Cost) Total Cost of sugarcane ethanol $ per gallon (1$=2R$) (Private +External Cost) Total Cost of sugarcane ethanol $ per gallon (1$=3R$) (Private +External Cost) er hectare, what is the cost per liter of ethanol? ducing corn ethanol ducing sugarcane ethanol er hectare, what are the emissions per hectare of corn ethanol ases to 75% what is the cost of gasoline per energy equivalent gallon of ethanol ent gallon in this case 1 gallon is equal to Emissions from gasoline Kg Co2 per liter Emissions from corn ethanol Kg Co2 per liter Emissions from sugarcane ethanol Kg Co2 per liter 1 ton is equal to kilograms Social Cost of Carbon $ per metric ton of CO2 Exchange Rate 1$ to R$ Exchange Rate 1$ to R$ e 5 billion gallons of corn ethanol? on gallons of sugarcane ethanol r gallon of gasoline (in gasoline equivalent gallons).What is the private cost per mile of driving ($ per mile) with gasoline when gasoline co of driving with gasoline hanol when corn ethanol costs $1.57 per energy eqivalent gallon of ethanol assuming the vehicle could drive on 100% ethanol and the energ anol when corn ethanol costs $1.57 per energy eqivalent gallon of ethanol assuming the vehicle could drive on 100% ethanol and the energy ne ethanol when sugarcane ethanol costs $1.98 per energy eqivalent gallon of ethanol assuming the vehicle could drive on 100% ethanol an e ethanol when sugarcane ethanol costs $1.98 per energy eqivalent gallon of ethanol assuming the vehicle could drive on 100% ethanol and liters from gasoline Kg Co2 per liter from corn ethanol Kg Co2 per liter from sugarcane ethanol Kg Co2 per liter ual to kilograms t of Carbon $ per metric ton of CO2 Rate 1$ to R$ Rate 1$ to R$ ontent of ethanol relative to gasoline 3.785 2.64 1.17 0.55 1000 50 2.00 3.00 67% US $ per energy equivalent gallon of ethanol 1.34 1.57 1.98 1.32 KG CO2 per ethanol equivalent gallon 6.70 4.43 2.08 $ per ethanol equivalent gallon 0.34 0.22 0.10 $ per ethanol equivalent gallon 1.68 1.79 2.20 1.42 ng ($ per mile) with gasoline when gasoline costs $2 per gallon? cle could drive on 100% ethanol and the energy content of ethanol is 67% of that of gasoline le could drive on 100% ethanol and the energy content of ethanol is 67% of that of gasoline ng the vehicle could drive on 100% ethanol and the energy content of ethanol is 67% of that of gasoline g the vehicle could drive on 100% ethanol and the energy content of ethanol is 67% of that of gasoline Suppose a project involves a fixed cost of $1000 in Year 0, annual costs of $200 each year in years 1,2,3, 4 and 5. It leads to an What is the net present value of the costs with a discount rate of 5% 0 1 2 3 4 5 Fixed Cost 1000 Annual Cost 200 200 200 200 200 Annual Benefit 600 600 700 800 Discounted costs Discounted benefits 2a: NPV of Cost 2b: NPV of Benefits 2c: NPV of Net Benefits 2d: Suppose the discount rate increases to 10%. What is the discounted value of the net benefits of the project now? 2e: Suppose the fixed cost in Year 1 increases to $2000. The discount rate is 10%. What is the discounted value of net benefits 1,2,3, 4 and 5. It leads to an annual revenue of $600 in years 2, 3, 4 and 5. f the project now? ounted value of net benefits of the project