The Impact of Policy on the Production of Liquid Biofuels

Sammanfattning: In the following thesis, the development of the biofuels sector in the United States will be analysed using environmental economics. Around year 2005, there was a significant increase in the production of liquid biofuels. Hence, the thesis aims to explore the reasons behind the increase. Acts of government have been analysed while enlisting the help of summaries and overviews accessed through various government agencies. The findings include the Volumetric Ethanol Excise Tax, the Renewable Fuel Standard, international agreements, price differences between biofuels and oil, and more. The correlation between policy introduction and the growing biofuels sector is established, while simultaneously considering other aspects. The implications of the introduction and removal of various incentives are explored while considering other aspects unrelated to policy. The findings of the thesis can help policy makers make informed decisions and apply the most suitable incentives while considering aspects like costs and public perception.