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CID Working Paper No. 192

Certification Strategies, Industrial Development and a Global Market for Biofuels1

Ricardo Hausmann and Rodrigo Wagner

Abstract

A disproportionately large amount of the world's agronomic potential for the production of bio-ethanol is concentrated in a subset of developing countries. To develop that potential, countries need both the existence of an appropriate local business ecosystem and reliable global demand. The creation of a global market for green biofuels, however, is affected by a constellation of diverse and sometimes conflicting policy goals, which tend to complicate policy discussion. In this paper we compile a set of principles to guide the design of a global market for green biofuels.

Keywords: market design, bio-energy, ethanol, sugarcane

JEL subject codes: Q48, L52, F14, F18

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*This document was prepared for the Conference on Biofuel Certification at Harvard University, May 2009.