Brazil's sugarcane sector : a case of lost opportunity

The Brazilian sugar and ethanol story goes like this: direct market intervention overrides market forces. Markets undergo dramatic change. Intervention establishes vested interests. Rent-seeking blocks adjustment to market change. Economic objectives become blurred behind political objectives. Opportunities go begging. Industry profitability suffers. And national income is forgone. The authors use a simple economic model of the Brazilian sugarcane sector and policy interventions to measure the costs of existing policies and to develop better policies. Brazil is an efficient producer of sugar, but policy intervention has caused: (a) underproduction of sugar cane (too much ethanol, not enough sugar); (b) missed opportunities to market ethanol in high-value uses (as an octane enhancer and clean fuel); (c)missed opportunities to make the world sugar market more competitive. Adopting more market-based policies could be worth billions of additional dollars annually to Brazil.Environmental Economics&Policies,Crops&Crop Management Systems,Economic Theory&Research,Transport and Environment,Access to Markets

How innovation systems emerge to solve ecological problems: Biofuels in the United States and Brazil

This paper discusses the re-emergence of biofuel innovation systems in the United States and Brazil. We argue that innovation systems emerge and evolve to solve a problem, and that the way the problem is framed and articulated has a significant impact on the direction and momentum of this evolution. Additionally, innovation sequences occur with a recurrent pattern of changing problems and innovative solutions. We consider the role of the State as a core actor in the mobilisation of innovation systems and discuss how specific institutional arrangements, political contexts and technological competencies influence how problems are framed. We find that role of the State varies across time as well as across different geographical regions. Finally, we suggest that as ecological problems intensify we might expect to see an increase in State intervention in innovation systems

No Reason to Wait: The Benefits of Greenhouse Gas Reduction in Sao Paulo and California

Outlines initiatives implemented by California and Sao Paulo to reduce the emissions of greenhouse gas, increase energy efficiency, and reduce air and other pollutants. Discusses economic, public health, and energy security benefits of the initiatives

Political Shaping Of Transitions To Biofuels In Europe, Brazil And The USA

Faced with major challenges of global climate change, declining fossil fuel reserves, and competition between alternative uses of land, the transition to renewable transport fuels has been marked by new modes of political economic governance and the strategic direction of innovation. In this paper, we compare the different trajectories to the development and uptake of biofuels in Europe, Brazil and the USA. In terms of the timing, direction, and development of biofuels for road transport, the early lead taken by Brazil in sugarcane based ethanol and flex-fuel cars, the USA drive to corn-to-ethanol, and the European domination of biodiesel from rapeseed, manifest significant contrasts at many levels. Adopting a neo-Polanyian ?instituted economic process? approach we argue that the contrasting trajectories exemplify the different modes of politically instituting markets. We analyse the contrasting weight and impact of different drivers in each case (energy security, climate change mitigation, rural economy development, and market opportunity) in the context of diverse initial conditions and resource endowments. We explore the ?politics of markets? that arise from the different modes of instituting markets for ecologically sustainable economic growth, including the role of NGOs, the scientific controversies over land-use change, and the contrasting political institutions in our case studies. We also place our analysis in the historical perspective of other major carbon energy transitions (charcoal to coal, coal to petrochemicals). In so doing, we explore the idea of the emergence of new modes of governance of contemporary capitalist political economies, and the significance of politically directed innovation. The research is based on an extensive primary research programme of in-depth interviews with strategic players in each of the geographic regions, qualitative institutional analysis, a scenario workshop, and secondary data analysis

Viability of Ethanol Motor Fuel in Brazil: Cost-Benefit Considerations

The study assesses the viability of ethanol fuel considering both private and social costs and benefits. Ethanol costs are calculated for different production scales, locations, and government subsidies. The results show that without government financing subsidies, ethanol fuel would be privately economical (at May 1981 prices) only in Southeast distilleries of appropriate scale. Northeast distilleries are uneconomical even with a shadow wage for labor. Foreign exchange savings from ethanol production are calculated, with the fining that relatively small savings are achieved. However, Brazil gains greater flexibility in sugar export earnings by being able to alter the production mix of ethanol and sugar depending on international prices. Social benefits of ethanol production include greater rural employment, the creation of rural industrial development poles, and national strategic considerations. yet ethanol from sugarcane has also displaced food crops, contributed to greater land concentration, and not reduced regional disparities

UNICA: Challenges to Deliver Sustainability in the Brazilian Sugarcane Industry

Teaching Notes Available: [email protected] Author video introduction: http://www.youtube.com/user/ifamr1#p/u/7/4kZDvS7v5NAsustainability, biofuels, ethanol, industry association, teaching case, Agribusiness, Crop Production/Industries,

Industrial Development and the Innovation System of the Ethanol Sector in Brazil

The purpose of this paper is to analyze innovations and the innovation system and its dynamics in the ethanol sector in the State of Sao Paulo. More specifically, this paper focuses on the development process in the sector, the public policies taken to promote the sector, and the organizations and key players involved in these policies and their responses to unforeseeable changes in economic, social and technological environments. To this end, this paper takes an historical perspective and reviews data on the cultivation of sugar cane, the production of ethanol, and on sugar cane yields as indicators of the innovations achieved in the sector. The geographical distribution of these indicators is also examined. Next, several cases in Piracicaba and Campinas in the State of Sao Paulo are presented; these give us a more concrete idea of the processes involved in innovation and technology transfer. Based on these observations, the ethanol cluster and the innovation system of the State of Sao Paulo are discussed from the viewpoint of the flowchart approach to industrial cluster policy