The IUCN Academy of Environmental Law series
Edited by Yves Le Bouthillier, Annette Cowie, Paul Martin and Heather McLeod-Kilmurray
Chapter 16: Network governance of biofuels
In many countries around the world, the biofuels industry has been almost universally dependent on government support policies. Market interventions include policies designed to stimulate domestic production through subsidies to producers, investment in biofuels research and development (R & D) and import tariffs on biofuels, as well as regulations to create demand by mandating biofuel use. As a result of such laws, regulations and policies, existing biofuels markets are heavily price-distorted. Forward and backward linkages with other markets that are highly volatile (for example, oil) and also price-distorted (for example, agriculture) make the economics of the biofuels industry exceedingly complex. The biofuels sector is a textbook example of network governance in operation, where an unlimited number of intersecting government and non-government actors carry out specific tasks in a flexible, unsystematic process of collaboration and competition. Authority over policy decisions and associated regulatory rule-making is dispersed among many different actors operating at different levels. Network (or multi-level, or multilateral, or global) governance involves “the upward diffusion of power to regional and international organizations as well as the downward diffusion of power to various sub-national governments”. Governance includes not only government measures, but also a wide range of regulatory or quasi-regulatory powers exercised by private actors, including firms, industry associations and third-party standard-setting organizations.