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Promoting biofuels: Implications for developing countries

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  • Peters, Jörg
  • Thielmann, Sascha

Abstract

Interest in biofuels is growing worldwide as concerns about the security of energy supply and climate change are moving into the focus of policy makers. With the exception of bioethanol from Brazil, however, production costs of biofuels are typically much higher than those of fossil fuels. As a result, promotion measures such as tax exemptions or blending quotas are indispensable for ascertaining substantial biofuel demand. With particular focus on developing countries, this paper discusses the economic justification of biofuel promotion instruments and investigates their implications. Based on data from India and Tanzania, we find that substantial biofuel usage induces significant financial costs. Furthermore, acreage availability is a binding natural limitation that could also lead to conflicts with food production. Yet, if carefully implemented under the appropriate conditions, biofuel programs might present opportunities for certain developing countries.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 36 (2008)
Issue (Month): 4 (April)
Pages: 1538-1544

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Handle: RePEc:eee:enepol:v:36:y:2008:i:4:p:1538-1544

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Citations

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Cited by:
  1. Hira, Anil, 2011. "Sugar rush: Prospects for a global ethanol market," Energy Policy, Elsevier, vol. 39(11), pages 6925-6935.
  2. Marjolein C.J. Caniëls & Henny Romijn, 2010. "The Jatropha Biofuels Sector in Tanzania 2005-9: Evolution Towards Sustainability?," Working Papers 10-04, Eindhoven Center for Innovation Studies, revised Jun 2010.
  3. da Silva César, Aldara & Otávio Batalha, Mário, 2010. "Biodiesel production from castor oil in Brazil: A difficult reality," Energy Policy, Elsevier, vol. 38(8), pages 4031-4039, August.
  4. Perdiguero, Jordi & Jiménez, Juan Luis, 2011. "Sell or not sell biodiesel: Local competition and government measures," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(3), pages 1525-1532, April.
  5. Rahman, Syed Masiur & Khondaker, A.N., 2012. "Mitigation measures to reduce greenhouse gas emissions and enhance carbon capture and storage in Saudi Arabia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 2446-2460.
  6. Matthias Diermeier & Torsten Schmidt, 2012. "Oil Price Effects on Land Use Competition – An Empirical Analysis," Ruhr Economic Papers 0340, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  7. Arndt, Channing & Pauw, Karl & Thurlow, James, 2012. "Biofuels and economic development: A computable general equilibrium analysis for Tanzania," Energy Economics, Elsevier, vol. 34(6), pages 1922-1930.
  8. Carriquiry, Miguel A. & Du, Xiaodong & Timilsina, Govinda R., 2011. "Second generation biofuels: Economics and policies," Energy Policy, Elsevier, vol. 39(7), pages 4222-4234, July.
  9. Venghaus, Sandra & Selbmann, Kirsten, 2014. "Biofuel as social fuel: Introducing socio-environmental services as a means to reduce global inequity?," Ecological Economics, Elsevier, vol. 97(C), pages 84-92.
  10. Iye, Edward & Bilsborrow, Paul, 2013. "Cellulosic ethanol production from agricultural residues in Nigeria," Energy Policy, Elsevier, vol. 63(C), pages 207-214.
  11. Bazilian, Morgan & Rogner, Holger & Howells, Mark & Hermann, Sebastian & Arent, Douglas & Gielen, Dolf & Steduto, Pasquale & Mueller, Alexander & Komor, Paul & Tol, Richard S.J. & Yumkella, Kandeh K., 2011. "Considering the energy, water and food nexus: Towards an integrated modelling approach," Energy Policy, Elsevier, vol. 39(12), pages 7896-7906.
  12. Kalim Shah & George Philippidis & Hari Dulal & Gernot Brodnig, 2014. "Developing biofuels industry in small economies: Policy experiences and lessons from the caribbean basin initiative," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 19(2), pages 229-253, February.
  13. Yang, Hong & Zhou, Yuan & Liu, Junguo, 2009. "Land and water requirements of biofuel and implications for food supply and the environment in China," Energy Policy, Elsevier, vol. 37(5), pages 1876-1885, May.

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