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  • Use Government Purchasing Power. The enormous purchasing power of governments has been used successfully in a number of countries to expand the market for various products. Government purchasing of vehicles and fuels that are certified under sustainability schemes (which could eventually involve a GHG component), could provide a powerful market driver. Local governments can switch entire fleets to vehicles that run on biofuels, as many have already done. National governments could gradually increase the share of their fleets that are fueled by biofuels and ramp up to 100 percent; the one exception might be tactical military vehicles.

  • Collaborate to Set International Fuel Quality Standards. While many nations have developed or adopted biofuel quality standards, others still need to take this step. In order to develop a significant international biofuel market, fuel quality standards need to be agreed upon and enforced on the international level. This is necessary for consumer confidence and will gain increased importance as international trade in biofuels expands. Automakers need assurances of consistent fuel characteristics so they can honor vehicle warranties.

  • Account for Externalities. Although it is extremely difficult, decision makers should find ways to assign monetary values to currently uncounted externalities, including local and regional pollution, health problems, climate change, and other environmental costs, as well as potential benefits, such as job creation and rural revitalization. This can be done through tax increases or incentives. For example, in the case of climate change, this could be done through a carbon cap and trade system (note, however, that this would not likely benefit biofuels in the short term).

  • Facilitate Public-Private Partnerships. Public-private partnerships have resulted in important technological breakthroughs that have led to dramatic cost reductions (for example, in the enzymes needed for the breakdown of cellulose via enzymatic hydrolysis), and will continue to play an important role in advancing next-generation technologies.

  • Increase Public Awareness. Consumer demand could be a powerful driver of the renewable fuels market. Strategies to increase the public’s awareness and comfort level with biofuels include various forms of public education, such as formal awareness campaigns, public announcements, university research, and signage along highways. Typically outside the government sphere, but also potentially effective, informal methods include discussions on radio, blogs, podcasts, and the use of biofuels in movies and television shows.

Mandates paired with subsidies have also proven to be an effective combination for biofuels industry promotion; however, subsidies should be phased-out once a domestic industry has been established. Subsidies are often difficult to discontinue once created, so phase-outs should be strategically designed into the enabling legislation. For instance, subsidies for current-generation biofuels can be phased out first, while those for next-generation feedstock and refineries continue.

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