Analysing Government Decision Making in the South African Biofuels Industry: A Game Theoretic Approach

The production of biofuels in many countries is largely driven by the government strategy and incentives that are in place. In South Africa the first round of the development of such a draft strategy took place in 2005 while the official stance on biofuels was finalized in December of 2007. During the policy development process various governmental departments had strategic goals and targets that they all were required to achieve. The achievement of these strategic targets and goals is also risky and the various departments that have some form of involvement in the biofuels industry need to decide on how much risk they are willing to take. This article sketches the game that the various governmental departments played as well as the risks that they were faced with when writing the Industrial Biofuels Strategy. In establishing a Nash Equilibrium and when comparing this to the current state of affairs in the industry an investigation is launched as to what has caused the governmental department to divert so strongly from this position. A variable Z is defined and included in the model in order to explain the current state of affairs. The Z variable is also analyzed further in order to bring some form of structure to the debate on the government’s stance on the issue.Biofuels, Game Theory, Government Strategy, Agricultural and Food Policy, Research Methods/ Statistical Methods,

Counting Zariski chambers on Del Pezzo surfaces

Zariski chambers provide a natural decomposition of the big cone of an algebraic surface into rational locally polyhedral subcones that are interesting from the point of view of linear series. In the present paper we present an algorithm that allows to effectively determine Zariski chambers when the negative curves on the surface are known. We show how the algorithm can be used to compute the number of chambers on Del Pezzo surfaces

Modelling the impacts of the industrial biofuels strategy on the South African agricultural and biofuel subsectors

The potential impact of the current South African industrial biofuels strategy on the economic feasibility of biofuel production in South Africa is analysed and discussed. The analysis is then taken a step further by means of a scenario to analyse the potential impacts of higher global prices on the feasibility of a local biofuel industry. The BFAP sector model, a partial equilibrium model, is used to simulate the various impacts over the period 2009 to 2017. This study shows that the incentives and commitments, as presented through the strategy, are not sufficient to get a local biofuel industry up and running and make it sustainable in the long term.Resource /Energy Economics and Policy,

Modelling the impacts of macro-economic variables on the South African biofuels industry

The production of biofuels from agricultural commodities has received much attention in recent years. Apart from a few private initiatives, biofuels have not seen a large scale, commercial production in South Africa to date. This article sketches a basic picture of the economic feasibility of biofuel production in South Africa, without any form of government support, at 2006 prices. It then takes the analysis a step further and with the aid of a set of scenarios, different potential outcomes, due to a range of possible policy implementation measures, are discussed and the results documented. The Bureau for Food and Agricultural Policy’s (BFAP) sector model is used to simulate the impact of various options on the potential biofuels industry and other related industries during the course of the 2007 to 2015 period. This study shows that a lack of government support for the local biofuels industry could seriously affect its economic viability, especially in the early stages of the industry’s development. Additional issues, such as the impact on food and feed prices, also need to be taken into consideration.Resource /Energy Economics and Policy,