The International Renewable Energy Agency (IRENA at www.irena.org), founded in 2009, has put into practice the idea of combining the efforts of many governments around the world to cooperate on renewable energy policies, financing, and technologies. Nowadays, the Agency counts 143 members plus 29 countries in accession. The main mission of the IRENA is to create cooperation and synergies at a global scale to enhance technology and strengthen innovation by means of knowledge-sharing initiatives, enabling policies advances across countries and at all level of governance, as well as contributing to the common goal of energy safety and supply achieved with the use of renewable energies.

The first study worldwide dealing with renewable energies is REmap 2030 (www.irena.org/remap), which is a plan aiming at doubling the use of renewable energies at a global level by 2030. The study addresses bioenergy issues in 26 countries that are representative of three-quarters of actual energy demand. The main finding of this study is that these countries would reach and surpass the targets of global renewable energy share by 30% by 2030, given the present available technology. This target can also be achieved by considering investments in renewable energies in the key energy intensity sectors such as buildings, transport, industry, and electricity. Furthermore, the transition to this new economy using 30% of renewable energies and taking into account socio-economic benefits can be attained at minor additional costs. Finally, the global roadmap will enable countries to reduce CO₂ emissions by 8.6 Gt by 2030 and contribute defense against climate change (IRENA, 2014).

In a number of countries regulation is currently being adopted or under scrutiny to favor energy supply and safety. The following description will focus on the European Union, United States, Brazil, and China.

Current debate mainly focuses on the assessment of indirect effects. These are more difficult to quantify given that an increased dependence from biofuels (in particular first-generation biofuels) would increase the demand for land to meet the requirements of off-site land conversion. As a consequence, significant zero (or negative) net impacts on climate change (ie, in terms of increasing GHG emissions) would result. The risk of considerable carbon emission coupled with land-use has been, until present, mostly ignored. Few studies (Hill et al., 2006; Zah et al., 2007; Searchinger et al., 2008; Schmer et al., 2015) assess the magnitude of increasing emissions from land-use changes and there is still concern on the quantification issue for indirect effects. Substantial efforts are required to address the correct measurement of indirect effects on GHGs of land-use changes for biofuels feedstock production. The conversion of land for agricultural activities (ie, from forests to agricultural lands) undergoes considerable losses of carbon through time because this is released at consecutive stages during the conversion process. Positive net carbon costs would be obtained with the benefits arising from displacement effects of fossil fuels emissions gained over new land-use for biofuels production. However, since time plays an important part when computing net benefits, a “justified” period of time consisting of the lifetime of indirect effects of land-use changes helps the decision maker to regulate land-use issues. Some studies (Righelato and Spracklen, 2007) consider a 30-year time a justified period for indirect effects to occur. This is based on the average time frame of ethanol plants and, as a consequence, the land change occurs as long as 30 years when ethanol feedstock production most probably takes place. Other studies (Renewable Fuels Agency, 2008) consider the payback period (the time that land conversion needs to give positive GHG impacts) of biofuels production, arguing that most carbon effects are intensified during the first 10 years of land conversion because the release of carbon is more sensitive. Marshall (2009) argues on two time periods for the lifetime of the biofuels feedstock production: the first is a “project horizon,” the effective time period needed for biofuels feedstock to grow on a specific (converted) land; in essence, the time for which the converted land is planned to be used for feedstock production. This period could also be shortened or amplified according to changes occurring in biofuels technologies or at policy level (ie, changes in the subsidy rate). The second is the “impact horizon,” which considers the environmental aspect (carbon emissions) over the converted land for biofuels feedstock production. This would not necessarily be as long as the project horizon time-span because its effects are generally prolonged over time. In fact, GHG reductions linked to biofuels production terminate as soon as the biofuels production (on that land) ceases; the consequent emission reductions still remain in place (Marshall, 2009). It is important to know the distinction of these two time effects to assess effective policies for adequate land use. Knowing about the length of time for project and impact horizons would also mean recognizing economically viable biofuels land-use changes and, consequently, setting efficient carbon emission strategies.

A similar issue to consider for measuring net indirect effects of land conversion is an “efficient” discount rate for comparing the outcomes of various projects for land-use changes into biofuels activities. Some (Howarth, 2005; Charles et al., 2013) argue against high discount rates, which reflect time uncertainty for future outcomes in investments for biofuels activities. Others (Marshall, 2009; Ripplinger et al., 2012) assert that discounting functions should also be seen under a physical carbon-content perspective. The aim is that comparisons across investments activities for setting up biofuels productions should also be performed such that environmental considerations for payback mechanisms are consistent with sustainable practices.

Other environmental impacts of biofuels production can be found in numerous life-cycle assessments, mainly for biodiesel, in the transport sector (Booth et al., 2005; Bozbas, 2008; Nanaki and Koroneos, 2012). These studies normally conclude with recognizing the positive effects in terms of GHG emission reductions. Recently, life-cycle assessments are also of concerns for environmental effects from algae fuels (Slade and Bauen, 2013; Quinn et al., 2014; van Boxtel et al., 2015; Trivedi et al., 2015). As for other pollutants, biodiesel and ethanol production also produce zero emissions in terms of sulfur dioxide (which, in general, are emitted during the burning of fossil fuels). Relevant reductions can also be seen in terms of carbon monoxide and hydrocarbons (Schmidt, 2004; Nwafor, 2004; Millo et al., 2015). The literature seems controversial about the effects on nitrogen oxides and dioxides (Bergthorson and Thomson, 2015). Nitrogen oxide emissions in vehicles using biodiesel engine are found at slightly higher levels than those in conventional diesel engine. However, a modification of the engine would reduce these levels and the negative effect could be considered of no relevance (Booth et al., 2005; Jedynska et al., 2015). Nitrogen dioxide emissions would instead occur from biofuels feedstock processes as well as potential effects on ozone layer (Franke and Reinhardt, 1998). In a recent study by Winchester et al. (2015), advanced biofuels would have small impacts on aviation emissions (including nitrogen emissions).

Feedstock processes either for biodiesel or for ethanol production also present three further environmental effects such as fertility of soils, biodiversity, and hydrological impacts (Kartha, 2006). Extended agricultural practices also affect increases of indirect emissions of carbon as well as other dangerous GHGs (eg, NO_x) and contribute to deforestation and biodiversity losses.

Large use of monoculture for biofuels production also has an impact on the excess use of fertilizers and pesticides on the environment. Biofuels feedstock production significantly affect the ecosystem, either boosting biodiversity or threatening existing species and the natural habitat. Bunzel et al. (2015) assess a model for pesticide excess from energy crops. The authors analyze six energy crops such as maize, potato, sugar beet, winter barley, winter rapeseed, and winter wheat and, through the use of a GIS technique, assess the biodiversity risk for aquatic invertebrates. The main conclusions suggest that potato, sugar beet, and rapeseed present a higher ecological risk to aquatic invertebrates than maize, barley, and wheat. The authors finally suggest that given that maize has a lower ecological risk from pesticide pollution, its cultivation could be preferred compared to other monocultures for biofuels purposes. Also, the use of set-aside lands for biofuels feedstock production causes, for example, drawbacks in terms of water pollution (because of the use of fertilizers and pesticides) and local biodiversity. On the other hand, biofuels production offers a good example of biodiversity protection compared to other conventional agricultural practices. In several countries (Brazil for example), existing regulation requires leaving proportion of lands in natural flora and fauna to preserve biodiversity losses (Turley et al., 2002). Robertson and Doran (2013) add an important contribution to the role of biofuels and biodiversity protection. The authors suggest several strategies against energy sprawl debate. First, lands for biofuels production should not include areas providing ecosystem services. Second, to preserve landscape at best, best management practices should be identified and applied on the entire biofuels chain. Third, set-aside programs could consider buffer natural areas around main crop lands to protect biodiversity. A number of challenges are placed for biofuel productions and the management of soil fertility. First, the possibility of recycling for small organic and plant nutrients. Current agricultural practices (in particular in developing countries) for soil management depend on the crop wasted. Second, feedstock nutrients can be retrieved during land conversion processes and applied to the crop field for biofuel production. Finally, hydrological effects are also important. Some bioenergy crops require the same amount of water irrigation as food crops (ie, sugarcane). Best agricultural practices should avoid water infiltrations of water wastes to guarantee an efficient growth of bioenergy crops (eg, use of marginal or uncultivated agricultural lands) (Miyake et al., 2015).

In general, employment generation in rural areas is mostly dependent by the type of crop used for biofuels production (eg, sugarcane), although this should be seen according to market structure and income distribution. Given that agricultural production in rural areas is mostly labor-intensive, extra demand of agricultural products is likely to increase wage and employment. Relevant effects on job creation are in fact significant either by employing feedstock conversion practices or by acquiring feedstock locally. Small-sized farmers could accelerate multiplier income effects (Hazell and Pachauri, 2006; Huang et al., 2012). As a consequence, increased liquidity in local markets would have positive repercussions on the economy of rural areas. In Brazil or in the United States, for example, while large firms control the bioenergy industry, small-sized growers (in developing countries that are organized in cooperatives) represent an important link between large corporations and independent farmers.

Raman et al. (2015) look at incorporating social-value dimensions in the assessment of second-generation biofuels (ie, lignocellulosic biofuels). Based on expert knowledge approach and a social-innovation model, the authors conduct interviews with relevant stakeholders in the United Kingdom to assess potential impact and challenges of lignocellulosic biofuels in the socio-economic context. Main findings suggest that human health impacts are not currently taken into account in the international debate of liquid biofuels; also, more attention should be devoted to ownership issues (ie, size of land, size of ownership) in the management of lignocellulosic–biorefinery model. The authors also suggest disclosing biomass energy-distribution issues and creating partnerships between multinational enterprises and local farmers to overcome or reduce the gap between regulations at various levels.

The second aspect of biofuels policy is the question of food safety versus land management. Rosengrant et al. (2006) model (with the use of the IMPACT model developed by the International Food Policy Research Institute at Consultive Group on International Agricultural Research–GIAR) the interactions between the demand of land for biofuels feedstock and the demand of land for food purposes and analyze how these interdependences affect food commodities and prices. The authors consider three main scenarios: (1) a massive growth in biofuels and no changes in productivity, (2) the use of second-generation biofuels in current agricultural practices, and (3) considerable biofuels growth with changes in agricultural productivity and a switch to production of second-generation biofuels. Results suggest in case (1) a remarkable increase in food prices causing sizable losses in rural areas in developing countries. The need of subsidizing biofuels would then occur with consequent distorting mechanisms due to unproductive agriculture and bioenergy sectors. In the second scenario (2) a change in technology would increase food price but at a lower rate compared to the first scenario. Finally, the last scenario (3) shows that a combination of technology improvements and productivity increases would alleviate shocks in food prices and favor the growth of small-size farmers devoted to the supply and development of local markets.

The International Centre for Trade and Sustainable Development (2008) argues on competition of land for food versus land for biofuels feedstock. In principle, higher food prices would not automatically damage poor people. Rather, increases in food prices could be seen as income generator for farmers working in poor rural communities. This vision is not, however, totally shared by a number of researchers (Naylor et al., 2007; Goldemberg, 2008) and institutions (the World Bank, 2008). In particular, Goldemberg (2008) recalls that the problem of land competition over food and biofuels productions should be seen as a problem of food safety versus climate issues. The entire “food question” is the consequence of a renewed interest in the agricultural sector because of the ease of profits in biofuels energy productions.

Naylor et al. (2007) argues on the increasing rate, over the last years, in demand for energy commodities as income rise. This scenario would determine increases in real energy as well as food commodities prices reversing, in the latter case, what was once the long-term declining trend in agricultural prices. The volatility of food prices causes strong impacts on undernourished populations, who typically spend almost their income in food commodities. Linkages between food and energy prices are inevitable. While these were once seen in terms of agricultural energy inputs, in the present day these could be determined by the revenue prices of feedstock for biofuels productions required to cover production costs. At an international level, these relationships would be most difficult to determine given a number of determinants affecting food and energy prices, such as the demand elasticity of agricultural commodities, national policies over land management for biofuels and food crops, and the presence of institutional support to incentivize biofuels productions. Recently, there are only a few quantitative models explaining international transmission of price volatility for biofuels and agricultural commodities (Abdulai, 2000; Conforti, 2004; Schmidhuber, 2006; Peri and Baldi, 2008; Hertel and Beckman, 2010; Algieri, 2014), and these focus either on national case studies (ie, Ghana, Iran, Italy, United States), or selected agricultural crop and biofuels commodities. A recent study by Abdelradi and Serra (2015) assesses the link between European rapeseed oil, biodiesel, and Brent prices. Rapeseed price-volatility seems greatly affected by biodiesel prices, which in turn affect food commodities. The authors conclude that in Europe, this cycle is counterbalanced by the effect of the Euro/dollar exchange rate. A further implication occurs between shipment aids (from richer countries) and food prices (Falcon, 1991; del Ninno et al., 2007). Countries relying on food aid (ie, Sub-Saharan or Southern Asian countries) are subject to substantial domestic critical effects (ie, production and land availability, internal market prices instability, government responses) in the presence of global food price peaks such as that occurred in 2008. The consequences on world food safety are also recognized by the World Bank (World Bank, 2008). Generally, when food and energy prices peak (Fig. 2.1), this causes important macroeconomic effects, mostly on domestic economies. Inflation, for example, hits developing economies that fight to keep inflation rates between 5% and 7% (Fig. 2.2). The same countries also experience fluctuations in inflation rates.

Worsening of balance of payment also causes a reduced capacity of developing countries to sustain (by reducing official reserves) import exposure in the immediate future. Most emerging economies still show relevant risks (although these have decreased since 2014) in potential output growth (International Monetary Fund, 2015).

Furthermore, when emerging economies are also energy-intensive importers, a damaging effect of terms of trade contributes to exacerbate their institutional and economic vulnerability. Pressures on wages and other costs become inevitable for such institutions where fiscal and monetary policies are too vulnerable concerning food and energy price fluctuations. This and the rising of income inequality (including the aggravating of poverty) in developing countries asks for immediate implementation of adequate policies.

G8 as well as the United Nations countries agreed on a number of initiatives: (1) a continuous support to fund the World Food Program in addition to the provision of financial and technical assistance for the supply of agricultural commodities; (2) in a longer-term perspective, investments in agricultural and rural infrastructures to guarantee market access especially in African, South Asian, and small-island countries (Negash and Swinnen, 2013); (3) enhancing technological investments in developing as well as developed countries for second- and third-generation biofuels from cellulose based ethanol and algae products (Lee et al., 2015); and (4) to promote the reduction in trade tariffs for biofuels commodities and improve the functioning and implementation of international agreements affecting agricultural markets (World Bank, 2008).

A substantial role for the development of rural (and also industrialized) areas and the mitigation of competing food markets when enhancing biofuels activities is the intervention of the public sector. The use of land for biofuels feedstock could have negative impacts on the demand for food commodities, causing food prices to increase due to the scarcity of productive land for food production. Lack of sufficient natural-resource endowments for biofuels crops causes consistent losses, especially in poor areas. Similarly, attempts to alleviate poverty through oil palm plantation may have negative impacts on lands in some Asian countries (Mintz-Habib, 2013). A price increase in food commodities is detrimental to those farmers experiencing a net deficit of food production. Unjustified repercussions on consumer prices would then occur (in rural/poor areas) where elasticity demand to agricultural products is high. To avoid the occurrence of vast social costs, public intervention results a necessary tool that helps to reduce market failures and rebalance trade-offs between food and bioenergy through adequate supporting policies (Hazell, 2006). These can be in the form of incentives: to increase the productivity of food production such that additional land and water can be used for biofuels crops, to convert infertile lands to second-generation biofuels, to use by-products from food production to boost bioenergy commodities, and to remove barriers to trade and obtain the benefits of competitive markets for biofuels commodities at any scale of technology. Supporting policies also guarantee independent and small-sized farmers in less-developed countries the opportunity to process bioenergy commodities at a local level. In addition, the identification of all stakeholders in the biofuels chain becomes fundamental when setting policy targets in the food sector at national level. The Brazilian example is a success. First, for the recognition of new demand in environmentally-friendly automobile industry through the use of ethanol fuels; second, for setting subsidies to enhance economies of scale in the agricultural as well as the automobile sector; third, for integrating the private sector in the public management for electricity supply from bioenergy products; and fourth, for creating new stimulus to rural activities employed in biofuels production.

There exists a link between developed and rural areas for biofuels production. Large-scale biofuels activities in developed countries may reduce the export of food products, pushing the prices of these goods up. This would in turn positively affect rural areas in developing countries benefitting of higher net surpluses in food commodities. Contrarily, higher world prices would also mean scarcity of food products for poor households living in rural areas. When this negative effect is counterbalanced by higher employment and income perspectives in the biofuels industry, the net impact at aggregate level generates economic growth led by the agricultural system. From this perspective, biofuels chain can make a substantial role to combat poverty and improve food safety. The production of energy from bioenergy crops, together with the sustainable use of local resources, could result in higher standards of living for the rural society as a whole. Additional energy resources to the local community would finally contribute to the local development of rural economic activities, including agricultural enhancements and food security.

A final aspect to discuss concerning the link between biofuels/bioenergy and rural development is the enhancement of second-generation biofuels. Studies on jatropha production in African countries (Venturini Del Greco and Rademakers, 2006) are currently in support of several benefits at community level, although these benefits could possibly be achieved under certain circumstances (Bryant and Romijn, 2014). The benefits derive from an integrated approach run by public enterprises (and managed by private firms) to jatropha production such as electricity consumption, milling services, additional oil for sale purposes, and by-products used in soap manufacturing and fertilizer use. Van der Plas and Abdel–Hamid (2005) argue in favor of biofuels from wood production in rural areas in Sub-Saharan African countries. Of relevant interest is the demand of creation from urban centers and the transparency of relationships (contractors, distribution of rents, etc.) between these and rural areas supplying biofuels. The intricate but efficient legal network thus running in these areas contribute either to the enrichment of small farmers' wealth or to the sustainable resource use.

Studies on potential production of second-generation biofuels with limited or no effect on land for food production are also currently under examination in the international debate. Chen et al. (2016) examine the potential development of non-food biofuels in China over the next years. According to these authors, China has about 75–152 million metric tons of biofuel production from agricultural marginal land and forest residues during the period 2015–2030. Chen and Zhang (2015) analyze the potential of sustainable agriculture for biofuels production from non-food lignocellulosic biomass and ecosystem security, thus to improve food access in rural areas. New challenges, opportunities, and sustainability criteria to reduce the land for food versus land for energy debate are finally examined for the African continent (Abilia, 2014; Pradhan and Mbohwa, 2014; Bracco, 2015).

To recognize biofuels for emission reductions and improving environmental quality, a GHG credit mechanism in the form of a subsidy is being considered as an instrument to incorporate (credit) that externality in the final price of biofuels commodities. Evidence of distortionary effects of subsidies is nonetheless common in economics such that caution should be used when implementing such tools (Koplow, 2006; Steenblik, 2007; Pacini et al., 2013). The distortion would rise when using subsidies for unproductive investments with consequent market inefficiency (ie, in production, consumption and prices), causing loss of well-being to the society and damaging the natural environment. Further debate considers the potential relationship between crude oil prices and food prices (Tyner, 2007). The economic crisis peaked in 2008 put considerable pressure on primary food prices (ie, corn prices). In this situation, a fixed subsidy rate on biofuels feedstock (ethanol for example) would certainly not help to keep food prices down. Contrarily, subsidizing the biofuels industry increases investments in the sector, causing food prices to rise with damaging repercussions in the economies of the developing world. Tyner (2007) considers alternative policy mechanisms to a fixed per unit subsidy, such as a variable rate linked to crude oil prices, or higher subsidies to enhance third-generation biofuels (ie, cellulose-based ethanol) to reduce agricultural prices and reestablish the balance between land cultivation for food and land for biofuels feedstock. An opposite view can be found in the work of Reboredo (2012), who examines estimates of co-movement between oil and food prices over the period 1998–2011. He argues for a weak dependence between food and oil prices, and that increase in food prices should be seen within the structure of the agricultural market forces.

Other measures than subsidies can be advocated for biofuels production. These are in the form of investments grants (from government and/or public institutions) to ensure that adequate start-up phases for agricultural feedstock conversion and efficient distribution at pumps take place. Furthermore, in the United States and the European Union, forms of fuel-excise tax credit are allowed to biofuels blenders. These can claim the tax credit for the blending content of renewable fuel used in a unit of (fossil) fuel sold. Also, carbon dioxide–excise tax exemption is practiced in support of biofuels commodities consumption. Finally, an additional form to support biofuels use aims at protecting domestic industries through the use of tariffs on imported biofuels goods. This instrument is currently used across a number of countries or block of countries, being more or less damaging on the competitiveness of international trade.

Various support policies are adopted across countries to promote biofuels use. In the European Union, the Commission Directive 2009/28/EC on the promotion of energy from renewables establishes Member States' shares in renewables required by the Commission by 2020. Renewables shares are illustrated in Table 2.2, as well as biofuels shares in 2007 (European Commission, 2009). As for biofuels, current projections (EurObserv'ER, 2015) in Fig. 2.3 estimates that the European Union can still achieve the targets of renewable fuels under Commission Directive 2003/30/EC, according to each member states' National Renewable Energy Action Plan (NREAP).

In order to achieve the desired targets, the EU allows for certain tax measures to promote biofuels use across Member States. Of particular interest are tariffs for ethanol imports. These correspond to €0.10/L for denaturated ethanol and €0.19/L for undenaturated ethanol (Sugarcane, 2015). Although these measures are still seen as protectionist approaches to biofuels production (and therefore a threat to resource access) from developing countries' perspective, biofuels industries in the European Union are relatively “new” (compared to those already in place in Brazil or United States). Furthermore, the latest European Union enlargement and the restructuring of the energy market (and that of Eastern European economies) may be seen as arguments in favor to the use of tariffs on imported biofuels commodities to promote the development of a European biofuels market. Prevalent practices across the European Union are also those incorporating rates into the selling of transport fuels that are comparable to 3.5% of total fuel use in the transport sector from 2010. On average, tax rates on biodiesel and ethanol are currently 50% lower than those applied on diesel and gasoline.

Likewise, in the United States, similar measures are used to support the biofuels chain (including consumption). These can be found in the form of tax incentives for switching-fuel engine cars, or quality standards on fuels. Over the last years, the American public support has turned its attention to third-generation biofuels (eg, biomass/cellulose based biofuels), sustaining numerous projects. Excise tax credits ($1.00/gallon biodiesel tax credit for producers or blenders of pure biodiesel and biodiesel from biomass) and import tariffs are mainly used as instruments for biofuels support across States (U.S. Department of Energy, 2015). The support policy for biofuels in the United States tends to apply low tariffs on imported biofuels commodities. Tariffs on ethanol are, for example, the equivalent of 1.2–2.5% from countries outside NAFTA. Blending practices are also notably applied to favor the reexport of biofuel commodities, in particular to the European Union.

In other countries such as Brazil, China, Japan, or Canada, other specific, but analogous measures, are being implemented. Brazil has long benefitted from tax exemptions, and also blending of ethanol to fossil fuels (ranging between 20% and 25% of ethanol content) is regulated according government resolutions. Lately, biodiesel blending to diesel mandates are in the figure of 2% and 5% from 2013, respectively. On the international side, Brazil will increase (from current 9.25% to 11.75%) a range of federal taxes on a number of commodities including ethanol (Voegele, 2015). China has only recently supported the production of biofuels, although its promotion is still going through an experimental phase. The government, on the other hand, fully supports the distribution losses across the country. Blending with other fuels (enforced at 10%) is in force only in few cities (ie, around 26 in 2006), and substantial subsidies are currently in place, including forms of refund for value added.

Similar to China, the Japanese experience in biofuels production is also experimental and most policies aim at setting targets for biofuels use in the transportation sector only. Canada, on the other hand, is a step forward compared to Asian countries. Compulsory mandates for blending ethanol and biodiesel in fossil fuels range between 2% and 5% content by 2012. At federal level, Canadian government is heavily supporting (CAD 2.2 billion from 2008; OECD, 2008) biofuels production and consumption with additional tax exemption measures, subsidies, and import tariffs (CAD 0.05/L) on biofuels imported commodities.

Secondly, bioenergy production also contributes to a number of environmental issues other than carbon (and other) emission reductions, such as biodiversity, soil productivity, and land-use change. The debate mainly concentrates on the measurement of indirect effects of land-use change and accounting practices for carbon reduction. Thirdly, the expansion of rural areas and food safety is central to the advancement of biofuels production. The nexus between rural development and bioenergy focuses on three main aspects: social benefits of biofuels policies such as innovation, job, and income creation having positive repercussions on rural communities; public sector intervention and the progression of second-generation biofuels from non-food crops; and food security versus land-management issues. This is at the heart of current debate on food versus energy prices. The international community, through financial aid and support in technological advances, plays an important role in protecting undernourished populations and marginal areas in developing economies.

Fourthly, the increasing support for biofuels policies over the last years has taken place under a variety of tools. Subsidies to the biofuel industries have been instrumental to reach the international success of bioenergy practices, although the presence of distortionary effects on the society advocated by economic theory counterbalance the positive effects (on the economy and environment) arising from biofuels productions. Various support policies are being adopted across countries to promote biofuels use including capital grants, tax incentives, and trade tariffs.

Finally, the contribution of agriculture and forestry conversion to bioenergy crops to climate change mitigation. Currently, positive benefits for climate change mitigation from agricultural biofuels practices are not recognized within international climate change agreements such as the Kyoto Protocol. This would leave developing countries, where technology level is limited, to remain incapable of contributing to carbon reductions and generating income from bioenergy credits. The creation of cap-and-trade systems for bioenergy crops and afforestation and reforestation programs is on the way in various countries for two reasons: to incentivize the sugarcane industry and sell carbon emission credits, and favor the creation of value added. This would support the international diversification of carbon markets and help distributing the benefits of carbon credits from bioenergy sources in agricultural and rural areas.