Abstract
Using subregional models of crop production choices in central Wisconsin and southwest Michigan, we predict biomass production, land use, and environmental impacts with details that are unavailable from national scale models. When biomass prices are raised exogenously, we find that the subregional models overestimate the supply, the land use, and the beneficial environmental aspects of perennial biomass crops. Multi-market price feedbacks tied to realistic policy parameters predict high threshold absolute prices for biomass to enter production, resulting in intensified production of biomass from annual grain crops with damaging environmental impacts. Multi-market feedbacks also predict regional specialization in energy biomass production in areas with lower yields of food crops. Policies promoting biofuels will not necessarily generate environmental benefits in the absence of environmental regulations.