Green business in Brazil: a study of sugar and ethanol

Globally green business has witnessed tremendous growth and is seen as an alternative to fossil fuel and a solution to global climate change. Among the green businesses, biofuel industry has witnessed a tremendous growth globally. Brazil is the leading producer of ethanol at 27 billion sugarcane based liters in 2009. This report discusses the history of ethanol in Brazil by considering the role played by the government in making the ethanol program successful the challenges and impact faced by sugarcane ethanol and the future sustainability of sugar and ethanol. Ever since the spike in oil prices globally and the increasing concern about carbon emissions and global climate change, Brazil has pursued a policy of promoting international climate change commitments. The blossoming of the ethanol industry can be traced to a number of public policy initiatives. The initiatives taken by the Brazilian government to enhance the productivity of sugarcane cultivation through large investment in R&D is one crucial factor. The enhanced production of ethanol was accompanied by the initial development of a vehicle operating purely on ethanol in the 1980s, as well as the revolutionary introduction of Flexible-Fuel Vehicles (FFVs), which are capable of running on gasoline and ethanol or at any blending rates of both fuels. FFVs to a large extent have contributed to the development and sustenance of the biofuel industry in Brazil. However, many analysts have cast doubt about the sustainability of the Brazilian ethanol program as the government has recently suggested lowering the current ethanol-to-gasoline blending rate for fuel in Brazil from 25 to 20 percent. The system seems to be facing a need for changes through better planning and consideration for internal consumers. If ethanol prices continue to rise due to demand-supply unbalances, carbon emission targets could be impacted due to potential switching to gasoline. Studies have indicated that when ethanol prices are above the 70 percent ceiling price of gasoline, then con