The emergence of second generation biofuel industries will be heavily dependent on future prices of ethanol, which could incent landowners to switch land uses from agriculture to growing biofuel feedstocks. In this study, we investigate price levels of ethanol that will be necessary for landowners to grow hybrid poplar. In such an emerging industry, landowners will face a great deal of uncertainty and will consider options to change their production decisions over time. To address this uncertainty, we construct a real options model that considers the dynamic option for Canadian landowners to switch from agriculture to poplar plantations, and also the option to sell poplar plantations for ethanol or pulpwood. The uncertainty in prices for poplar is characterized by time series models of prices for ethanol and pulpwood that characterize price variability as a GARCH process, and reversion to the long term mean average prices. Uncertainty for the value of land allocated to agriculture is characterised by a geometric random walk. Given these price processes, the real options models suggest that current average price levels would have to increase by approximately 35% (i.e. by 0.21 $/L) if only ethanol is considered as an end product, but this increase may be reduced to 32% (i.e., to 0.19 $/L) if the landowner has options to sell the poplar to either ethanol or pulpwood producers. On low value agriculture lands, estimates suggest that an 18% increase relative to current ethanol prices (i.e., of 0.11 $/L) would be needed, which is approximately equal to the current second generation subsidies in Alberta.

第二代生物燃料产业的兴起将在很大程度上取决于乙醇的未来价格，这可能会刺激土地所有者将土地利用从农业转变为生长的生物燃料原料。在这项研究中，我们调查了地主种植杂种杨的必要乙醇价格水平。在这样的新兴行业中，土地所有者将面临很大的不确定性，并将考虑随着时间的推移改变其生产决策的选择。为了解决这种不确定性，我们构建了一个实物期权模型，该模型考虑了加拿大土地所有者从农业转向杨树人工林的动态选择，以及出售乙醇或纸浆林的杨树人工林的选择。杨树价格的不确定性以乙醇和纸浆价格的时间序列模型为特征，该模型将价格变异性描述为GARCH过程，并转换为长期平均价格。分配给农业的土地价值的不确定性以几何随机游走为特征。考虑到这些价格过程，实物期权模型表明，如果仅将乙醇作为最终产品，则当前的平均价格水平将不得不提高约35％（即，提高0.21美元/升），但这一涨幅可能降至32％ （即至0.19 $ / L），如果土地所有者可以选择将白杨出售给乙醇或纸浆生产商。在低价值农业用地上，估计表明相对于当前的乙醇价格（即0.11美元/升），需要增加18％，