Biofuels in developing countries: Are comparative advantages enough?

This paper investigates the role of comparative advantage on biofuel policy adoption.

Results show that different countries have different drivers to create biofuel policies. GDP proves to be more significant for OECD countries, while arable land and feedstock prices are more significant for non-OECD countries. Land allocation may also be of importance. We speculate that a naturally endowed comparative advantage may not necessarily equate to a successful biofuel industry.