Public policy and biofuels: The way forward?

The use of biofuels has been given much attention by governments around the world, especially in increasingly energy-hungry OECD nations. Proponents have argued that they offer various advantages over hydrocarbon-based fuels, especially with respect to reducing dependence on OPEC-controlled oil, minimizing greenhouse gas (GHG) emissions, and ensuring financial and lifestyle continuity to farmers and agriculturally dependent communities. This paper adds to the continuing technical debate by addressing the issue from a holistic public policy perspective. In particular, it looks at the proposed benefits of biofuels, yet also addresses the implications of increased demand on the global and regional environment, in addition to the economic welfare of developing nations. Furthermore, it posits that short-term reliance on biofuels vis-à-vis other alternative energy sources may potentially inhibit the development and maturation of longer-term technologies that have greater potential to correct the harmful effects of fossil-fuel dependence. In light of this, the manifold policy instruments currently employed or proposed by governments in developed nations to promote biofuels emerge as questionable.