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Research Report

Avoiding deforestation in the context of biofuel feedstock expansion: An analysis of the effectiveness of market-based instruments

Pablo Pacheco
Laura German
Jan Willem van Gelder
Katinka Weinberger
Manuel Guariguata
Copyright Date: Jan. 1, 2011
Pages: 46
OPEN ACCESS
https://www.jstor.org/stable/resrep02308
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Table of Contents

  1. (pp. 1-2)

    Efforts by Western nations to reduce their dependence on fossil fuel imports and mitigate climate change by increasing their use of biofuels have precipitated a debate about the implications of biofuel feedstock development for food security, deforestation and local people’s rights (Cotula et al. 2008, FAO 2008, Bringezu et al. 2009). Despite current criticism, for industrialised countries, biofuels hold promise as a way of increasing fuel security, meeting climate change mitigation targets and providing a stimulus for investments in the agriculture sector. Developing countries aiming to produce for the biofuel market also see promise in the sector for its potential...

  2. (pp. 3-5)

    Many methodological challenges are associated with this review. The first is that many MBIs, although operational in other sectors, are still in their infancy in the biofuels sector; this requires that we draw on experiences from other sectors to analyse the risks and opportunities associated with their likely implementation in the biofuels sector. Second, it is difficult to assess implementation outcomes of some of these instruments (such as biofuels finance) because of the absence of prior analyses of their effectiveness or limited information disclosure. Note, though, that the issue of access to information is not exclusive to cases governing the...

  3. (pp. 6-12)

    Some principles and guidelines aimed at promoting sustainable production are designed to govern the production of specific feedstocks (e.g. soybean, sugarcane, oil palm), whilst others target biofuel production as a whole. The aim of these instruments is to encourage individual landholders or companies to adopt sustainable production standards through incentives to secure access to markets. Instruments in this group range from criteria that corporations impose on themselves (self-regulation) to standards that are developed within wider frameworks comprising legal, social, economic and environmental aspects and involving a wide range of stakeholders, and that may or may not be certified by an...

  4. (pp. 13-28)

    The findings on the effectiveness of the selected MBIs are organised according to the methodology employed. The first section evaluates effectiveness based on the instruments’ design features, and the second section evaluates them based on experience in applying them within, or beyond, the biofuels sector.

    As noted, we first evaluate the MBIs (those operating in relation to production and trade, biofuel finance and the provision of environmental services) based on their design features. After briefly describing the design features of various sets of instruments, we compare and contrast these features as a step towards drawing out hypotheses about how these...

  5. (pp. 29-31)

    The previous sections discussed the main strengths and weaknesses of 3 types of MBI that aim to promote sustainable production by: stimulating the adoption of appropriate production practices; imposing conditions on access to financial resources; or providing rewards to protect the provision of environmental services. Four challenges arise for these different instruments in terms of their ability to influence individual or corporate actors’ land use decisions in relation to avoiding or reducing deforestation. The first type of challenge is inherent in the MBI design – considering the criteria that an instrument adopts or the processes through which it operates. The...

  6. (pp. 32-32)

    This review reveals an important development – the introduction of numerous MBIs supported by a range of actors and pursuing diverse pathways to promote sustainable production of and responsible investment in biofuel feedstocks, whilst securing the provision of environmental services. Whereas some of these instruments are initiatives from non-state actors (e.g. landholders and industry associations, environmental NGOs, private financial institutions), others have actively involved state actors (e.g. governments in consumer countries, multilateral development banks). It is likely that over time, forms of hybrid instruments will emerge prominently from greater synergies between state and non-state actors, and linkages between MBIs and...