Implications of a future global biofuels market for economic development and international trade

May 2007

This is the report of the John F. Kennedy School of Government’s workshop on biofuels organized on the 9th of May 2007. Harvard University John F. Kennedy School of Government brought together experts from academia, international institutions, government and the private sector to explore possible implications of emerging global biofuels markets for economic development and international trade. The workshop was convened by the Sustainability Science Program and the Environment and Natural Resources Program at Harvard University at the request of the Chair of the Global Bioenergy Partnership in order to advise GBEP members on this topic and to inform future policy research efforts.
The workshop was born out of the extremely rapid rise of interest in biofuels around the world, reflected at the highest levels of international policy, with the United States’ President, George W. Bush, announcing a goal of a 5 fold increase in biofuel use by 2017 and the European Union establishing a 10% binding minimum target for the share of biofuels in overall EU transport liquid fuel consumption by 2020. Brazil, an established leader in the use of biofuels, is considering a major increase in its capacity, while countries as diverse as India, Peru, South Africa, Nigeria and Indonesia perceive biofuel production as a means to address their national needs. Much effort has been devoted to exploring the goals for biofuel use, scenarios of its penetration into global and local energy markets, alternative biofuel technologies and their performance standards and the possible impacts of biofuel development on other sectors and social goals.
Although the results of this ongoing debate was the background of the present workshop, it was not its focus. Rather, the participants concentrated on the strategic policy issues raised by the growing attention to biofuels. If the world were to dramatically ratchet up biofuel production and consumption as suggested by current pledges and plans, it will need development policy and regulatory frameworks traditionally concerned with food and fibre production to enter the complex arena of global energy policy. This transition is unlikely to occur without substantial confusion and uncertainty. Similarly, major national and global commitment of land and water resources to biofuel production will almost certainly have major implications for other sectors that rely on those resources, from agriculture to ecosystem conservation. But it is unlikely that present policy arrangements can cater for such a dramatic realignment of interests and incentives governing resource use. There is a need for systematic thinking of how policy toward biofuels could best be developed, domestically and internationally, to maximize the long-term benefits to society. To stimulate such thinking, it was assumed for the duration of the workshop that biofuels will become a significant component of the world energy system over the next decades.

By: H. Lee, W. Clark, R. Lawrence, G.Visconti (John F. Kennedy School of Government)

 
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