From Hindsight to Foresight: Biofuels in Agriculture and Forestry

Abstract

The Canadian forest sector is facing a time of significant transformation. In this brief we argue that regulatory analysis and foresight is an essential component of the successful transformation of the forest sector. As a first step to a regulatory analysis and foresight, we will illustrate here how to think about regulation based on the hindsight gleaned from the agricultural sector. Specifically we will derive lessons learned from the history of agricultural biofuels. A shift of energy production toward biofuels seems to support all of the three pillars of sustainable development. Accordingly, the most widely produced transport biofuel internationally, agricultural ethanol, has been marketed as a smart and green choice and as better alternative to oil-based gasoline. This image is now crumbling somewhat. We will focus on lessons learned from the agricultural biofuels story (paying special attention to the case of ethanol) and explore what hindsight can teach us.

JEL Classification: L5, L78