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Developing biofuels industry in small economies: Policy experiences and lessons from the caribbean basin initiative

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  • Kalim Shah
  • George Philippidis
  • Hari Dulal
  • Gernot Brodnig

Abstract

With increasing concerns about rising energy demand and cost, diminishing oil reserves, and climate change, Central American and Caribbean (CAC) nations have the opportunity to become producers of low-carbon sustainable biofuels for domestic consumption and foreign exchange earnings. While the region has a number of comparative advantages for developing a vibrant biofuels sector, including favorable climate and significant agricultural experience, the experience under the favorable Caribbean Basin Initiative (CBI) has exposed significant technical and non-technical barriers that must be overcome. Using information compiled through interviews with industry executives, government policy makers and civil society stakeholders, we provide a critical analysis of this experience focusing on non-technical barriers to investment. Survey results suggest that political uncertainty, poor regulatory frameworks, and lack of institutional commitment and business incentives are the main non-technical barriers. Having laid out the challenges, we propose potential policy positions to stimulate growth of the regional biofuels sector. Results point to the need to prioritize enhancing national legislation, developing risk prevention plans, creating supply and demand side incentives and increasing multilateral collaboration. While these findings are derived from the Caribbean Basin experience, they may also be applicable to small economies in other regions that are considering policies for biofuels industry development. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • 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.
    • Handle: RePEc:spr:masfgc:v:19:y:2014:i:2:p:229-253
    DOI: 10.1007/s11027-012-9437-8
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    1. Bundhoo, Zumar M.A. & Shah, Kalim U. & Surroop, Dinesh, 2018. "Climate proofing island energy infrastructure systems: Framing resilience based policy interventions," Utilities Policy, Elsevier, vol. 55(C), pages 41-51.
    2. Mihail Nikolaevich Dudin & Nikolaj Vasilevich Lyasnikov & Vladimir Dmitriyevich Sekerin & Anna Evgenevna Gorohova & Vyacheslav Viktorovich Burlakov, 2016. "Provision of Energy Security at the National Level in the Context of the Global Gas Transportation Industry Development," International Journal of Energy Economics and Policy, Econjournals, vol. 6(2), pages 234-242.
    3. Beckman, Jayson, 2015. "Biofuel Use in International Markets: The Importance of Trade," Economic Information Bulletin 262114, United States Department of Agriculture, Economic Research Service.
    4. Shah, Kalim U. & Niles, Keron, 2016. "Energy policy in the Caribbean green economy context and the Institutional Analysis and Design (IAD) framework as a proposed tool for its development," Energy Policy, Elsevier, vol. 98(C), pages 768-777.
    5. Bruno Locatelli & Paulina Aldunce & Abigaïl Fallot & Jean-François Le Coq & Eric Sabourin & Jeimar Tapasco, 2017. "Research on Climate Change Policies and Rural Development in Latin America: Scope and Gaps," Sustainability, MDPI, vol. 9(10), pages 1-17, October.
    6. Dornan, Matthew & Shah, Kalim U., 2016. "Energy policy, aid, and the development of renewable energy resources in Small Island Developing States," Energy Policy, Elsevier, vol. 98(C), pages 759-767.

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