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Economic And Environmental Implications Of Biomass Commercialization In Agricultural Processing, Bin Li, Onur Boyabatli, Buket Avci

Research Collection Lee Kong Chian School of Business

Motivated by the agricultural industries, this paper studies the economic and environmental implications of biomass commercialization; that is, converting organic waste into a saleable product, from the perspective of a processor that uses a commodity input to produce both a commodity output and biomass. We characterize the economic value of biomass commercializa- tion and examine how input and output spot price uncertainties affect this value. Using a model calibration, we find that lower input spot price variability or higher output spot price variabil- ity or correlation between the two spot prices increases this value for a typical palm oil mill. …