Determinants for Biofuel Policies in the Americas

Abstract

The biofuels market has been increasingly important due to the benefits they provide to society by giving an alternative to fossil fuels. In the Americas, many countries are using biofuel-related policies to incentivize the production of biofuels. Different countries have different reasons to have biofuel policies, among them are variables related to country development, energy security, food security, oil price fluctuation, rural employment, and environmental issues. With the objective of finding determinants for biofuel policies among countries of the Americas, this study conducted a logit regression with panel data using a random effect model, with information from 27 countries of the Americas for a 25-year period, available in the World Bank, FAO, and EIA. Apart from the variables of oil reserves and rural employment, the results were consistent with our expectations. Variables related to food and energy security and country development were found to be highly significant.