Sweetness and power: the political economy of sugar policy change

Lead Research Organisation: Nottingham Trent University
Department Name: Business School

Abstract

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Description Biofuels policies are driven by a 'tripod' of factors: energy security, climate change mitigation and rural development/agricultural policy. They have, however, developed in different ways in different countries, reflecting domestic institutional, economic and political contexts; and with different benefits being claimed of biofuels varying over time.



In 1970s Brazil, energy security and agricultural/rural development dominated. Recently, climate change mitigation has become more important. Since 2005, Brazil's biodiesel policy has grown, with a strong social policy dimension linked to rural development. In the US, energy security and agricultural support were major factors initially, with climate change concerns becoming more important recently. In the EU, energy security and rural development were always present; but biofuels have been an important part of the environmental and climate change agenda the EU has sought to lead globally.



One common element has been the dominance of first-generation, or conventional, biofuels, based on agricultural feedstocks which also have food or animal-feed uses. The creation of biofuels markets has, however, only been a partial success. Current EU and US policies set ambitious targets into the next decade, but growing recognition of the potential downsides of conventional biofuels, (notably land-use change and the sustainability of production along the biofuels supply-chain), has affected policy.



First, there have been efforts to promote advanced biofuels, which are not produced from agricultural feedstocks and thus avoid the food-versus-fuel conflict. Some also avoid land-use conflicts. Many deliver superior greenhouse gas emissions performance over conventional biofuels. But, currently, there is virtually no large-scale commercially-available advanced biofuels production; and technological uncertainty means it is not known when/if such production could be forthcoming. Yet policymakers have placed faith in such production emerging within a decade.



In the US, technological limits have created a 'blend wall', a demand-side limit on the percentage of ethanol that can be blended with gasoline for use in unadapted engines. Brazil has a mature ethanol market, but problems have arisen from the overlap with agricultural commodity markets. Poor sugarcane harvests, plus high sugar prices, have reduced ethanol production. Brazil has thus become a significant importer of ethanol even though the EU and US, when they developed their policies, saw Brazil as a source of seemingly limitless supplies of ethanol.



Second, policies have become more complex to deal with the downsides of conventional biofuels. The first project paper published (Ackrill and Kay, 2011, Journal of Agricultural Economics), analyses how feedstock production sustainability criteria can be established which avoid creating barriers to trade. It is thus an applied study of policy formation in the presence of external policy constraints.
Exploitation Route There are three key non-academic uses for the outputs of this project. Academic outputs are being written with a strong emphasis on practical policymaking issues, which will be relevant to policymakers. Outputs, especially the book we are intending to produce and are currently waiting on a publisher to review our proposal, will help disseminate widely information about biofuels and the biofuels policy process, which will be useful to other parties involved in biofuels, such as NGOs. Third, our publications, but in particular the book, will help enhance the understanding of the general public about this issue. This research is already producing articles in academic journals. This can contribute to academic analyses of policy processes. It is also intended that these outputs will have a strong policy focus and will thus be relevant to policymakers wishing to obtain an outside perspective on policy processes and how these can be improved.
Sectors Agriculture, Food and Drink,Energy,Environment,Government, Democracy and Justice,Transport