Access to an adequate energy supply at reasonable cost is crucial for sustained economic growth. Unfortunately, oil prices and the need to import from politically unstable countries lowers the reliability of the US energy supply and hinders economic development. Although biofuels have been identified as an important component of the national strategy to decrease US dependence on foreign oil, the ability to sustain a rapid expansion of biofuel production capacity raises new research and policy issues. This document seeks to identify the most critical of these issues to help inform the policy development process. The goal is to enhance the long-term economic and environmental viability of the biofuel industry and its positive impact on agriculture, rural communities, and national security.

During 2004-06, the Program on Energy & Sustainable Development undertook a study of the experience of independent power producers ("IPPs") in developing countries. As part of the study, the Program sponsored a series of country studies. These papers detail the basic contours of the IPP experience in each country and discuss the country factors identified in the research protocol. Additionally, each paper presents the universe of greenfield IPPs in the country, identifies the significant characteristics across which these projects vary, and selects a small number for individual examination.

This paper summarizes the experiences of the countries and projects that were part of the IPP study. Additionally, the paper provides a concise statement of project outcomes and a brief statement of the rationale underlying the analysis of each project. In doing so, the paper aims to gather in one place the disparate outcomes that are discussed in a long series of working papers, thereby providing a transparent and accessible document that will facilitate further study and critique of the original coding for the study, as well as of the analysis of projects and countries.

Nuclear energy is undergoing a renaissance driven by two very loosely coupled needs; the first for much more energy to support economic growth worldwide, and the second to mitigate global warming driven by the emission of greenhouse gases from fossil fuel. A new generation of power reactors has been developed that are safer, easier to operate, and purported to have lower capital costs. This, coupled with rising costs of fossil fuels and concerns about environmental pollution from fossil fuel power plants, has lead to an increase in orders for new plants, mainly from Asia, but beginning to impact North America and Europe as well.

India stands out in the IPP study as the second largest developing country market and features an evolving legal and regulatory regime created in the early 1990s specifically to promote investment in greenfield independent power projects.  India's electricity sector, which straddles state and federal jurisdictions, and India's experience with a diverse range of greenfield independent power producers have produced dramatic variation in investor strategies and outcomes, ranging from the disastrous Dabhol Power Project in Maharashtra to the modestly successful GVK project in Andhra Pradesh and Paguthan project in Gujarat.  The experience of host governments at the state level has also varied.  Given the political dynamics of the Indian power sector, discussed in detail below, it is hardly surprising that nowhere in India have politicians and state offtakers displayed truly lasting enthusiasm about IPP development.  In each of the four Indian states examined in detail in this paper (Andhra Pradesh, Gujarat, Tamil Nadu and Maharashtra), officials have openly and regularly criticized IPPs.

Global warming is one of the most difficult and important challenges facing the international community. To date, the most substantial effort to address this problem is the Kyoto Protocol. Although not adopted by the United States or Australia, this international agreement was adopted and ratified by every other large developed country and entered into force on February 16th, 2005. The Protocol is likely the largest ever international effort to combat a global environmental commons problem.

The Clean Development Mechanism ("CDM") is a market based trading mechanism

created by the Kyoto Protocol that functions by delivering a subsidy to the developing world in return for lower emissions of greenhouse gases. The subsidy offsets the cost of reducing GHG emissions, thereby encouraging less developed countries to emit less GHG than they otherwise would. As such, it represents the first attempt to address a global atmospheric commons problem using a global market. During the past 18 months, the CDM took on roughly the shape that it will likely have during the first commitment period of the Kyoto Protocol.

The goal of this paper will be to describe in some detail what that broad outline looks like and also what it can teach us about the design of future treaty architectures aimed at the control of GHG emissions and global warming.

Innovative financial instruments are being created to reward conservation on private, working lands. Major design challenges remain, however, to make investments in biodiversity and ecosystem services economically attractive and commonplace. From a business perspective, three key financial barriers for advancing conservation land uses must frequently be addressed: high up-front costs, long time periods with no revenue, and high project risk due to long time horizons and uncertainty. We explored ways of overcoming these barriers on grazing lands in Hawaii by realizing a suite of timber and conservation revenue streams associated with their (partial) reforestation. We calculated the financial implications of alternative strategies, focusing on Acacia koa ("koa") forestry because of its high conservation and economic potential. Koa's timber value alone creates a viable investment (mean net present value = $453/acre), but its long time horizon and poor initial cash flow pose formidable challenges for landowners. At present, subsidy payments from a government conservation program targeting benefits for biodiversity, water quality, and soil erosion have the greatest potential to move landowners beyond the tipping point in favor of investments in koa forestry, particularly when combined with future timber harvest (mean net present value = $1,661/acre). Creating financial mechanisms to capture diverse ecosystem service values through time will broaden opportunities for conservation land uses. Governments, nongovernmental organizations, and private investors have roles to play in catalyzing this transition by developing new revenue streams that can reach a broad spectrum of landowners.