Tuesday, July 3, 2007

Biofuels in marginal economies

Here is an(other) example of where I see the problems developing. In this article the author describes as one of Fiji's 'top priorities' the development of their biofuels industry, mostly coming from palm and sugarcane. Fiji is just one of dozens of small island/marginal economies trying to grab a piece of this market. When either (a) global supply far exceeds global demand causing a glut and prices paid to producers to plummet, (b) water problems start to creep in and show that biofuels are not as promising as they once were, or (c) some combination of both, will Fiji just be able to recover and go back to business as usual? Hardly. Larger biobased economies who have been in this space for decades (ie, Brazil) will be able to handle the transition...others won't be so lucky.

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