Biofuels: What a Biopact between North and South could achieve

Abstract

With very few exceptions, such as the recent remarks by International Energy Agency (IEA) head Claude Mandil, commentators on the world's energy issues have yet to recognize the enormous contribution that biofuels producers from the South could make to solving the world's greenhouse gas emission problems and problems to do with the peaking of oil supplies. Once the equation between biofuels and high-cost, land-intensive cultivation in the North is broken, and a quite different scenario involving production in the South is adopted, then the possibilities are dramatically changed. The argument of this paper is that a transition to substitution of 20 percent of OECD gasoline needs by 2020 could be met from the South by creating the equivalent of 18 Brazils over the course of the next decade. Such an enormous transition will not occur by itself, or through the operation of market forces alone. It needs an institutional framework, one that guarantees for the countries of the North regular supplies of biofuels produced in a responsible manner, and guarantees for the countries of the South open markets for the biofuels produced. The OECD is in the best position to bring about such an arrangement, through taking the initiative of offering developing countries a ‘Biopact’ between North and South, thereby creating for the first time a global market for biofuels. The launch of an International Biofuels Forum under the auspices of the UN in early 2007 is a step towards the creation of such an international framework where North-South issues on biofuels may be fruitfully addressed.