A joint project of GLS, FGV-São Paulo, and University College London
Many countries, including the US and
the EU, are looking to ethanol as a way to reduce dependence on petroleum and
lower carbon emissions from transportation. Brazil, which already runs 50% of
its automotive and truck fleet on ethanol, has been a pioneer in this area. Because Brazilian sugar cane ethanol brings
about substantial carbon emission savings over petroleum and because Brazil has
a lot of land that can be used to expand ethanol production, the Brazilian
government has identified ethanol as a product in which it has a comparative
advantage and made expansion of ethanol exports a development priority.
However, this initiative has run into a number of problems including tariffs
and other possible trade barriers in the major advanced country markets. One
issue facing Brazil today is the European Union’s sustainability criteria for
the use of ethanol under the Union’s Renewable Energy Directive (RED). The RED
establishes a number of requirements that ethanol must meet in order to count
towards the EU’s renewable energy goals. These include substantial emission
savings and limits on land use change. A complex public-private, transnational,
multi-level machinery is being established to determine compliance with the
sustainability criteria. Government and industry in Brazil are working together
to frame programs and policies that will meet reasonable environmental
requirements while exploring possible challenges to some aspects of the RED that
might violate WTO norms.
GLS, along with FGV-São Paulo and the Center for European Law and Governance at University College London (UCL) are cooperating on a study of the issues involved in making this system work for Brazil and the EU. David Trubek represents GLS in this project and is assisted by Paulina Calfucoy. Professor Joanne Scott from UCL and David Trubek presented a summary of the issues raised by the RED at a meeting of Brazilian scholars and representatives of government and industry was held at Direito GV in May 2011 GLS, UCL, and Direito GV are assembling a team of experts to study these issues.