The Growth of Biofuels in the 21st Century: Policy Drivers and Market Challenges PDF
Preview The Growth of Biofuels in the 21st Century: Policy Drivers and Market Challenges
Energy,ClimateandtheEnvironment Series Editor: David Elliott, Emeritus Professor of Technology Policy, Open University,UK Titlesinclude: ManuelaAchillesandDanaElzey(editors) ENVIRONMENTALSUSTAINABILITYINTRANSATLANTICPERSPECTIVE AMultidisciplinaryApproach RobertAckrillandAdrianKay THEGROWTHOFBIOFUELSINTHE21STCENTURY PolicyDriversandMarketChallenges PhilipAndrews-Speed THEGOVERNANCEOFENERGYINCHINA ImplicationsforFutureSustainability GawdatBahgat ALTERNATIVEENERGYINTHEMIDDLEEAST IanBaileyandHughCompston(editors) FEELINGTHEHEAT ThePoliticsofClimatePolicyinRapidlyIndustrializingCountries MehmetEfeBiresselioglu EUROPEANENERGYSECURITY Turkey’sFutureRoleandImpact JonasDreger THEEUROPEANCOMMISSION’SENERGYANDCLIMATEPOLICY AClimateforExpertise? BethEdmondsonandStuartLevy CLIMATECHANGEANDORDER TheEndofProsperityandDemocracy DavidElliott(editor) NUCLEARORNOT? DoesNuclearPowerHaveaPlaceinaSustainableFuture? NeilE.HarrisonandJohnMikler(editors) CLIMATEINNOVATION LiberalCapitalismandClimateChange AntonioMarquina(editor) GLOBALWARMINGANDCLIMATECHANGE ProspectsandPoliciesinAsiaandEurope EspenMoeandPaulMidford(editors) THEPOLITICALECONOMYOFRENEWABLEENERGYANDENERGYSECURITY CommonChallengesandNationalResponsesinJapan,ChinaandNorthern Europe MarlyneSahakian KEEPINGCOOLINSOUTHEASTASIA EnergyConsumptionandUrbanAir-Conditioning BenjaminK.Sovacool ENERGYÐICS JusticeandtheGlobalEnergyChallenge JosephSzarka,RichardCowell,GeraintEllis,PeterA.Strachanand CharlesWarren(editors) LEARNINGFROMWINDPOWER Governance,SocietalandPolicyPerspectivesonSustainableEnergy ThijsVandeGraaf THEPOLITICSANDINSTITUTIONSOFGLOBALENERGYGOVERNANCE XuYi-chong(editor) NUCLEARENERGYDEVELOPMENTINASIA ProblemsandProspects Energy,ClimateandtheEnvironment SeriesStandingOrderISBN978–0–230–00800–7(hb) 978–0–230–22150–5(pb) (outsideNorthAmericaonly) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to usattheaddressbelowwithyournameandaddress,thetitleoftheseriesand theISBNsquotedabove. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke,HampshireRG216XS,UK. The Growth of Biofuels in the 21st Century Policy Drivers and Market Challenges Robert Ackrill ProfessorofEuropeanEconomicsandPolicy,NottinghamBusinessSchool,Nottingham TrentUniversity,UK Adrian Kay ProfessorofGovernment,CrawfordSchoolofPublicPolicy,AustralianNational University,Australia ©RobertAckrillandAdrianKay2014 Softcoverreprintofthehardcover1stedition2014978-1-137-30788-0 Allrightsreserved.Noreproduction,copyortransmissionofthis publicationmaybemadewithoutwrittenpermission. Noportionofthispublicationmaybereproduced,copiedortransmitted savewithwrittenpermissionorinaccordancewiththeprovisionsofthe Copyright,DesignsandPatentsAct1988,orunderthetermsofanylicence permittinglimitedcopyingissuedbytheCopyrightLicensingAgency, SaffronHouse,6–10KirbyStreet,LondonEC1N8TS. Anypersonwhodoesanyunauthorizedactinrelationtothispublication maybeliabletocriminalprosecutionandcivilclaimsfordamages. Theauthorshaveassertedtheirrightstobeidentifiedastheauthorsofthis workinaccordancewiththeCopyright,DesignsandPatentsAct1988. Firstpublished2014by PALGRAVEMACMILLAN PalgraveMacmillanintheUKisanimprintofMacmillanPublishersLimited, registeredinEngland,companynumber785998,ofHoundmills,Basingstoke, HampshireRG216XS. PalgraveMacmillanintheUSisadivisionofStMartin’sPressLLC, 175FifthAvenue,NewYork,NY10010. PalgraveMacmillanistheglobalacademicimprintoftheabovecompanies andhascompaniesandrepresentativesthroughouttheworld. Palgrave®andMacmillan®areregisteredtrademarksintheUnitedStates, theUnitedKingdom,Europeandothercountries. ISBN 978-1-349-45572-0 ISBN 978-1-137-30789-7 (eBook) DOI 10.1057/9781137307897 Thisbookisprintedonpapersuitableforrecyclingandmadefromfully managedandsustainedforestsources.Logging,pulpingandmanufacturing processesareexpectedtoconformtotheenvironmentalregulationsofthe countryoforigin. AcataloguerecordforthisbookisavailablefromtheBritishLibrary. LibraryofCongressCataloging-in-PublicationData Ackrill,Robert,1965– Thegrowthofbiofuelsinthe21stcentury:policydriversandmarket challenges/RobertAckrill,AdrianKay. pages cm.—(Energy,climateandtheenvironment) 1. Biomassenergy—Governmentpolicy. 2. Renewableenergy sources—Governmentpolicy. 3. Energypolicy—Environmental aspects. 4. Energyresourcesdevelopment. 5. Biomassenergy industries. I. Kay,Adrian. II. Title. HD9502.5.B542A352014 333.95(cid:2)39—dc23 2014028113 Contents ListofTables,FiguresandBoxes vi SeriesEditor’sPreface vii PrefaceandAcknowledgements ix ListofAbbreviations xv Part I 1 BiofuelsandBiofuelsPolicies–AnIntroduction 3 2 BrazilianBiofuelsPolicy–AnIntroductionandOverview 29 3 EUBiofuelsPolicy–AnIntroductionandOverview 50 4 USBiofuelsPolicy–AnIntroductionandOverview 72 5 ComparingBiofuelsPolicyDrivers–CommonThemes, DifferencesandIssuesforAnalysis 94 Part II 6 TheChallengeofPolicyCapacityinBiofuelsPolicyDesign 111 7 BiofuelsPolicyDesignandExternal ImplementationChallenges 134 8 ExternalDimensionstoBiofuelsPolicies 154 9 BiofuelsPolicyChallenges 180 Notes 218 Bibliography 228 Index 246 v Tables, Figures and Boxes Tables 2.1 Productionofsugarcane,sugarandethanolinBrazil (’000tforcaneandsugar;m3 forethanol;annual percentagechange;andstandarddeviationofannual percentagechanges) 42 4.1 TheUSRenewableFuelStandard(billiongallons) 75 8.1 BiofuelspoliciesandWTOtraderules 158 9.1 PriceeffectsofEUbiofuelspolicy,andofglobalbiofuel mandates 186 9.2 Thecontributionofbiofuelspoliciestofoodpricesandto recentfoodpricespikes 190 Figures 1.1 Fuelethanolproduction,millionlitres,2000–2012,and triadshare,percentofworldtotal 7 1.2 Biodieselproduction,thousandbarrelsperday, 2000–2011,andtriadshare,percentofworldtotal 8 1.3 Greenhousegassavingsofbiofuelscomparedtofossil fuels 24 3.1 EUmemberstates’progresstowardstheir2020renewable energyusagetargets:2012,percentof2020targets 63 5.1 Linksbetweenthethreebiofuelspolicydrivers 107 Boxes 3.1 EUsustainabilitycriteria(exclusionary) 66 4.1 USsustainabilitycriteria(inclusionary) 83 vi Series Editor’s Preface Concerns about the potential environmental, social and economic impactsofclimatechangehaveledtoamajorinternationaldebateover whatcouldandshouldbedonetoreduceemissionsofgreenhousegases. There is still a scientific debate over the likely scale of climate change, andthecomplexinteractionsbetweenhumanactivitiesandclimatesys- tems,butglobalaveragetemperatureshaverisenandthecauseisalmost certainlytheobservedbuild-upofatmosphericgreenhousegases. Whatever we now do, there will have to be a lot of social and eco- nomicadaptationtoclimatechange–preparingforincreasedflooding and other climate-related problems. However, the more fundamental responseistotrytoreduceoravoidthehumanactivitiesthatarecaus- ingclimatechange.Thatmeans,primarily,tryingtoreduceoreliminate emissionofgreenhousegasesfromthecombustionoffossilfuels.Given that around 80 per cent of the energy used in the world at present comesfromthesesources,thiswillbeamajortechnological,economic and political undertaking. It will involve reducing demand for energy (via lifestyle choice changes – and policies enabling such choices to be made), producing and using whatever energy we still need more effi- ciently (getting more from less) and supplying the reduced amount of energy from non-fossil sources (basically switching over to renewables and/ornuclearpower). Eachoftheseoptionsopensuparangeofsocial,economicandenvi- ronmentalissues.Industrialsocietyandmodernconsumercultureshave been based on the ever-expanding use of fossil fuels, so the changes required will inevitably be challenging. Perhaps equally inevitable are disagreements and conflicts over the merits and demerits of the vari- ousoptionsandinrelationtostrategiesandpoliciesforpursuingthem. These conflicts and associated debates sometimes concern technical issues, but there are usually also underlying political and ideological commitmentsandagendaswhichshape,oratleastcolour,theostensi- blytechnicaldebates.Inparticular,attimes,technicalassertionscanbe usedtobuttressspecificpolicyframeworksinwayswhichsubsequently provetobeflawed. Theaimofthisseriesistoprovidetextswhichlayoutthetechnical, environmentalandpoliticalissuesrelatingtothevariousproposedpoli- ciesforrespondingtoclimatechange.Thefocusisnotprimarilyonthe vii viii SeriesEditor’sPreface scienceofclimatechange,oronthetechnologicaldetail,althoughthere willbeaccountsofthestateoftheart,toaidassessmentoftheviability of the various options. However, the main focus is the policy conflicts overwhichstrategytopursue.Theseriesadoptsacriticalapproachand attempts to identify flaws in emerging policies, propositions and asser- tions.Inparticular,itseekstoilluminatecounter-intuitiveassessments, conclusions and new perspectives. The aim is not simply to map the debates,buttoexploretheirstructure,theirunderlyingassumptionsand their limitations. Texts are incisive and authoritative sources of critical analysis and commentary, indicating clearly the divergent views that haveemergedandalsoidentifyingtheshortcomingsoftheseviews. Thatcertainlyappliestothepresenttext,whichexploresthebiofuels policy debate. It takes the adage that ‘there is no such thing as good biofuels and bad biofuels, only biofuels done well and biofuels done badly’asaguideandtriestomakesenseoftheoftenverychargeddebate overfoodv.fuelandland-usechanges.Theauthorsattempttobeneu- tral, but it is clear they are unhappy with the way the debate has been pursued,andtheyidentifywhattheyseeasmisconceptionsinrelation to some of the food/land-use issues. Drawing on material from Brazil, theEUandUS,theyofferausefulandcriticaladditiontotheextensive academicandNGOliteratureonbiofuelpolicyissues. Preface and Acknowledgements Thisisabookaboutpolicies.Specifically,itisabookthatexploreswhy governments have devoted so much attention and enormous intellec- tual, political and financial resources in recent years to promoting the productionofbiofuels,andtheiruseinroadtransport.Welookatboth howgovernmentshavedonethis,andwhy.Whilstgovernmentsaround theworldarepromotingbiofuels,wefocusonthethreecasesthatdom- inatetheproductionanduseofbiofuels–Brazil,theEUandUS.Wealso focusonthetwobiofuelswhichhavecometodominatenotonlythese policies, but also the debates circling around biofuels – ethanol and biodiesel. In addition to their market dominance, these three cases also offer important points of policy comparison and contrast. The EU and US have promoted biofuels on a significant scale only since the mil- lennium, a development which provides us with the title of this book. Aswellassignificantsimilaritiesbetweentheirpoliciesandtheirexperi- encesofbiofuelspromotion,weshallseeimportantdifferencesintheir domesticcontext,designandconsequences.Brazil,meanwhile,offersus twodistinctpolicies.One,forethanol,standsinsharpcontrasttorecent developments in the EU and US; the other, promoting biodiesel, offers elementsofsimilarityaswellasdifference. One feature all of these policies share, however – and this has really struckusaswehavewrittenupourresearchforthisbook–isthesheer scale of ambition policy-makers had in embarking on the path to the creationofbiofuelsmarkets.Thegoalofcreating,inmanycasesalmost fromscratch,andfrequentlyinonlyafewyears,boththesupplyof,and demand for, biofuels, is not only massively ambitious; it also appears to fly in the face of decades of experience marked by the progressive withdrawal of the state from markets. For reasons elaborated on later, wecannotjudgethewisdomofthisdecisionindefinitiveandabsolute terms of policy success or failure. We can, however, say that for rea- sons expanded on later, the scale of this policy ambition has, of itself, created challenges that policy-makers are still grappling with. Biofuels policies have, unambiguously, driven a massive expansion in biofuels productionanduseinrecentyears–butanalysisofthisevolvingwork- in-progressrequireslookingatmorethansimplythequantityofbiofuels nowoutthere. ix
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