This report shows that the high level of policy support contributes little to reduced greenhouse-gas emissions and other policy objectives, while it adds to a range of factors that raise international prices for food commodities.

This report shows that the high level of policy support contributes little to reduced greenhouse-gas emissions and other policy objectives, while it adds to a range of factors that raise international prices for food commodities.

In most countries, biofuels remain highly dependent on public support policy.

Environmental, Economic and Policy Aspects of Biofuels provides a timely summary of the current issues contributing to the policy debates on this emerging and important topic. The authors make several key conclusions: - Biofuels are diverse and evolving. The next generation of biofuels has the potential to provide improved net benefits but requires significant technological breakthroughs. - Greenhouse gas (GHG) benefits vary significantly across various types of biofuels and are dependent on market conditions and policy situation. - While biofuel improves the welfare of gasoline consumers and food producers, it has a significant negative affect on food consumers, especially the poor. - A diverse set of policies, which have been introduced or proposed, impact biofuels directly including subsidies, mandates, and regulation of carbon content of fuels. However, current policies do not provide incentives that align private and social welfare. - Much of the impact assessments of biofuels thus far are ex-ante estimates based on either optimization or equilibrium models. There is a lack of ex-post econometric analysis of the marginal impact of biofuels and biofuel policies on the economy. And the structural relationships between agriculture, the energy sector, and the environment in the context of biofuels have hardly been studied. The biofuel policy debate is likely to be an ongoing one in the near future and Environmental, Economic and Policy Aspects of Biofuels should be required reading for anyone interested in understanding this diverse and growing literature.

In its second volume, this book aims to link the academic research with development in the real world and provide a historical and institutional background that can enrich more formal research. The first section will include an assessment of the evolution and the state of the nascent second-generation biofuel as well as a perspective on the evolution of corn ethanol and sugarcane ethanol in Brazil. It will also include a historical and institutional background on the biofuel industry in Brazil that has global lessons, and later, provide a technical overview of major analytical tools used to assess the economic, land use and greenhouse gas implications of biofuel policies at a regional and global level. Additionally, the book analyzes the various drivers for land use change both at a micro-economic level and at a macro-economic level. It presents studies that apply regional and global economic models to examine the effects of biofuel policies in the US, EU and Brazil on regional and global land use, on food and fuel prices and greenhouse gas emissions. These papers illustrate the use of partial and general equilibrium modeling approaches to simulate the effects of various biofuel policies, and includes studies showing the effects of risk aversion, time preferences and liquidity constraints on farmers decision to grow energy crops for biofuel production. By presenting the tools of lifecycle analysis for assessing the direct greenhouse gas intensity of biofuels, this handbook investigates the types of indirect or market mediated effects that can offset or strengthen these direct effects. It will include tools to assess the direct and indirect effects of biofuel production on greenhouse gas emissions in the US and Brazil, and ultimately provide a comprehensive background to understand the state of biofuel in the present and how to analyze their implication.

Concerns about energy security, uncertainty about oil prices, declining oil reserves, and global climate change are fueling a shift towards bioenergy as a renewable alternative to fossil fuels. Public policies and private investments around the globe are aiming to increase local capacity to produce biofuels. A key constraint to the expansion of biofuel production is the limited amount of land available to meet the needs for fuel, feed, and food in the coming decades. Large-scale biofuel production raises concerns about food versus fuel tradeoffs, about demands for natural resources such as water, and about potential impacts on environmental quality. The book is organized into five parts. The introductory part provides a context for the emerging economic and policy challenges related to bioenergy and the motivations for biofuels as an energy source. The second part of the handbook includes chapters that examine the implications of expanded production of first generation biofuels for the allocation of land between food and fuel and for food/feed prices and trade in biofuels as well as the potential for technology improvements to mitigate the food vs. fuel competition for land. Chapters in the third part examine the infrastructural and logistical challenges posed by large scale biofuel production and the factors that will influence the location of biorefineries and the mix of feedstocks they use. The fourth part includes chapters that examine the environmental implications of biofuels, their implications for the design of policies and the unintended environmental consequences of existing biofuel policies. The final part presents economic analysis of the market, social welfare, and distributional effects of biofuel policies.