Biofuel and Biomass Subsidies in the U.S., EU and Brazil: Towards a Transparent System of Notification
By Tim Josling, David Blandford, and Jane Early
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IPC Policy Focus: Biofuel and Biomass Subsidies
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Support for the production and distribution of biofuels continues to expand in many countries. The magnitude and impact of these subsidies is imperfectly understood, as is their relation to the reporting and monitoring of subsidies in the WTO. The incidence of mandates and their accompanying subsidies is complicated by the number of ways in which subsidies are paid and by the various stages involved in the production and distribution of biofuels.
This paper is intended to examine the way in which information on biofuels support is reported in the U.S., the EU, and Brazil: the three major players in the biofuels market. It explores the relationship between these subsidies and the WTO monitoring of support under the Agreement on Agriculture (AoA) and the Agreement on Subsidies and Countervailing Measures (ASCM).
Transparency in subsidies is both a prerequisite for wise expenditure of public funds and an aid to avoiding trade disputes. Subsidies to both biofuels and fossil fuels are of interest as they relate to the price of energy and the control of greenhouse gas emissions. The time is ripe for an initiative to clarify both the status of biofuels subsidies in the WTO rules and the magnitude of such subsidies.