Introduction
Biofuels, the programs that support them, and the impacts of these policies on climate, environment and society have been subject to some of the most intense scrutiny of any areas of public policy in recent years. Public support for biofuels production has generated considerable controversy for a variety of reasons, including impacts on food prices and production decisions, as well as questions about environmental costs and benefits. These concerns are increasingly being raised in legislative bodies around the world. However, policies that address these issues may be challenged under international trade law.
Some of the controversy generated by biofuels policies relate to fundamental disagreements regarding appropriate targets and incentives for the production and use of biofuels. Others focus more narrowly on how to improve the sustainability of existing biofuels production in the United States and the possibility of new policies or programs to improve outcomes. But at the end of the day, while these conflicts focus specifically on the biofuel sector, their relevance is much larger.
Local, state and national governments around the world are increasingly attempting to embed sustainability criteria within their policies. These sustainability criteria span the spectrum of industries. Areas that may be included under “sustainability” criteria include policies that give preferences related to greenhouse gas emissions or other pollution levels, to policies focused on clean energy and safer materials, all the way to policies that support and protect local production and specific products.
How do programs incorporating sustainability criteria—whether for biofuels or other agricultural goods—stack up under World Trade Organization (WTO) rules? And what implications do WTO rules have for future government initiatives that give preference to sustainability and local production? If we are to construct the type of policies needed to address the multiple environmental, social and economic crises that we face, understanding how these policies interact with international trade rules is absolutely required. This paper is a first attempt—within the context of biofuel policy—to raise some of these questions and address necessary changes.
