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The European Union´s (EU) Renewable Energy Directive (RED) continues to be the focus of much debate over the validity of biofuel sustainability. The debate is driven in part by ongoing concerns of transparency and regional variations of emissions from feedstock cultivation and processing. In a working paper, Pehnelt and Vietze (2012) undertook a general analysis of rapeseed biodiesel greenhouse gas (GHG) savings. In light of the recent effort to decentralize assessments to regional (i.e. Member State) authorities to assess the sustainability of biofuel feedstocks, we have done the same for three Member States, incorporating the comments and critique we received on our latest working paper (Pehnelt and Vietze 2012). Using publicly available cultivation and production figures from Germany (the largest producer and consumer of rapeseed biodiesel), Poland and Romania, we analyse the greenhouse gas (GHG) emissions savings of rapeseed biodiesel which we then compare to the values of GHG savings identified in the RED. Under average conditions and conservative assumptions on N2O emissions, German rapeseed biodiesel meets the GHG savings requirements of 35 percent in the RED. However, in years with unfavourable weather conditions and lower yields, German rapeseed biodiesel may fail to reach the 35 percent threshold even with efficient production technologies in the subsequent steps of the supply chain. Taking into account higher N2O emissions due to fertilizer input as suggested by some researchers, German rapeseed biodiesel clearly fails to fulfil the 35 percent criterion required by the RED. Meanwhile, in no instance Polish or Romanian rapeseed biodiesel meet the RED's 35% GHG savings threshold. The assessment of the sustainability of rapeseed biodiesel heavily depends on the very production conditions and assumptions regarding the N2O field emissions. As a matter of fact, not every liter of rapeseed biodiesel produced in the EU is sustainable in the sense of RED. Therefore, the use of standard values (e.g. default values) in order to categorize rapeseed biodiesel - or any other biofuel - as sustainable or not is not justifiable. With renewable energy strategies proliferating throughout the world, the validity of technical criteria has become increasingly critical to the success of these strategies - particularly the fiercely debated RED. The application of technical criteria remains inconsistent, and in the case of the RED, resulting in unreliable assessments of biofuel feedstocks and heated debates over the authority of these assessments.

During the last years, the renewable energy strategy of the European Union (EU) and the proposed policies and regulations, namely the Renewable Energy Directive (RED), have been heavily discussed among scientific circles and various interest groups. The sustainability of different biofuels and their contribution to the reduction of greenhouse gas (GHG) emissions and the whole renewable strategy has become one of the most controversial issues. RED requires that the greenhouse gas emissions associated with production and use of biofuels are at least 35% lower than those associated with the production and use of conventional fuels to be classified as sustainable and therefore eligible for the mandatory blending scheme applied within the EU. In a recent working paper, we analyze the GHG emissions savings potential of rapeseed biodiesel. For this purpose, we ran a life cycle assessment of rapeseed biodiesel using the same basic methodology and background data contained in RED by considering the whole production chain from cultivation of the feedstock up to use of the biofuels. Unlike other studies, we refer only to publicly available and published data in our calculations. In order to ensure full transparency - again contrary to the vast majority of other studies - we provide a detailed documentation of all data. We follow a rather conservative approach by using average values and assuming common conditions along the supply chain in our scenarios. In most of the scenarios, rapeseed biodiesel does not reach the GHG emissions saving values using the formula contained in RED. Neither the RED typical value for rapeseed oil (45%) nor even the lower default value (38%) can be supported by the analysis. Furthermore, most of the scenarios indicate that rapeseed biodiesel does not reach the 35% threshold required by the EU Directive for being considered as sustainable biofuel. In the standard scenario, we calculate a GHG emissions saving value of not even 30% which is not only well below the GHG emissions saving values (default and typical) that can be found in RED but also far below the 35% threshold. To summarize, we are not able to reproduce the GHG emissions saving values published in the annex of RED. Therefore, the GHG emissions saving values of rapeseed biodiesel stated by the EU are more than questionable. Given these striking differences as well as the lack of transparency in the EU's calculations, we assume that the EU seems to prefer politically achieved typical and default values regarding rapeseed biodiesel over scientifically proven ones.

On 05 December 2010, the Renewable Energy Directive (RED) came into force in the EU. Member States are still working to fully transpose the Directive into national law and establish a framework for achieving their legally binding greenhouse gas (GHG) emission reductions. However, governments got off to a slow start as debate continues on the validity of the directives foundations including the default values used to measure the sustainability of biofuels. Only sustainable biofuels can be counted towards Member State targets. This, as a matter of principle, makes sense with respect to the very aim of renewable energy policies. On the other hand, the vague and distortive formulation and values regarding what is to be classified as sustainable have negatively impacted the perception of the underlying scientific base and methodologies as well as the reliability in the European biofuels sector. This uncertainty and the ongoing controversial debates are affecting investment and progress in the biofuel sector not just in Europe but all over the world. Producers of soybeans in the US, sugarcane in Brazil and palm oil in Malaysia and Indonesia as well as European importers and end-users of these products have all been sharply critical of the default values, citing significant variations in calculations that undermine the credibility of the values contained in the Directive. Given the remarkable difference between the calculation of carbon reduction performance of palm oil based biofuel by the EU and a range of scientific studies which we documented in an earlier paper (Pehnelt and Vietze 2009), we are re-calculating GHG emissions saving potentials for palm oil biodiesel in order to further assess the carbon footprint of palm oil to overcome the lack of transparency in existing publications on the issue and EU regulations governing the biofuel feed-stocks. The aim of this paper is to calculate realistic and transparent scenario based CO2-emission values for the GHG emission savings of palm oil fuel compared with fossil fuel. Using the calculation scheme proposed by the Renewable Energy Directive (RED), we derive a more realistic overall default value for palm oil diesel by using current input and output data of biofuel production (e.g. in South-East Asia) and documenting every single step in detail. We calculate different scenarios in which reliable data on the production conditions (and the regarding emission values during the production chain) of palm oil diesel are used. Our conservative calculations based on the Joint Research Centre's (JEC 2011) background data and current publications on palm oil production result in GHG emissions saving potentials of palm oil based biodiesel fairly above the 35% threshold. We cannot reproduce the EU's GHG saving values for palm oil. Rather, our results confirm the higher values obtained by other studies mentioned in our last paper (Pehnelt and Vietze 2009) and elsewhere in this study. Our results indicate default values for the GHG emission savings potential of palm oil biodiesel not only way beyond the 19 percent default value published in RED but also beyond the 35 percent threshold. Our findings conclude that the more accurate default value for palm oil feedstock for electricity generation to be 52%, and for transportation biodiesel between 38.5% and 41%, depending on the fossil fuel comparator. Our results confirm the findings by other studies and challenge the official default values published in RED. As indicated by lawsuits filed by environmental NGOs against the Commission for greater transparency related to the assessment of biofuels, the process has been severely lacking in full disclosure of metrics used to achieve the values contained in the Renewable Energy Directive. As a result, the reliability of the Directive to support the EU's low-carbon ambitions is being undermined, exposing the EU and Commission to charges of trade discrimination and limiting the ability of Member States to achieve their legally binding GHG emission reductions. This analysis demonstrates that a full review of the values contained in the Directive should be undertaken and the values revised to ensure their accuracy, and raises questions as to the method that the values were originally established. Were outside parties consulted, including the industries directly affected by the assessments in the Directive? Were these values peer reviewed? In light of grievances expressed by producers throughout the world, including US soybean growers, Brazilian sugarcane farmers, and Malaysian and Indonesian palm growers, ensuring the Directive does not discriminate against imports is critical to the long-term efforts in the EU to reduce GHG emissions.

This paper analyses the role of palm oil and its sustainability from different perspectives. We consider the role of palm oil within the GHG context. We discuss the impact of palm oil on biodiversity and analyse how palm oil can contribute to economic growth and development in tropical countries. Finally, based on this analysis, we assess the current concerns about and politics towards palm oil with special focus on the EU. Palm oil is a low-energy and low-fertilizer crop that offers much higher yields per hectare than other oil crops. Furthermore, if the energy obtained by the residuals in the production process is used properly, the energy balance of palm oil production is much more favourable compared to other biofuels. Overall, palm oil turns out to be much more efficient than other oil crops and therefore offers significant advantages within the context of GHG savings. Contrary to some recent campaigns and the perception among European citizens, oil palm plantings are not a major contributor to deforestation in tropical countries. Deforestation associated with oil palm plantings is much less significant than postulated by some recent campaigns. Furthermore, biodiversity in oil palm plantations is much higher than in most monocultures in the EU. Palm oil is an important driver of economic development and growth in tropical countries and contributes to the reduction of poverty and hunger in the developing world. The EU Renewable Energy Directive is discriminatory from the outset and the GHG saving values and their interpretation are based on wrong assumptions and faulty calculations. Therefore, the EU should reshape its policies towards palm oil, conduct objective and non-discriminatory calculations regarding the GHG emissions saving values and support palm oil imports from developing countries rather than restricting them. Together with certain initiatives to further enhance energy efficiency and to protect precious habitats combined with strategies to strengthen property rights and encourage efficient land use and successful strategies of agricultural development, this would not only prevent political conflicts and trade disputes in conjunction with the issue of palm oil but also foster economic growth and development, reduce poverty and - not least - contribute to the ambitious GHG emissions savings goals on a fair and reasonable basis

Few policy issues in Brussels and Washington DC are met with such a compact unity across political boundaries as the idea of deepened transatlantic economic integration. Twenty years after the fall of the Berlin Wall, the support for transatlantic economic co-operation remains strong. The election of Barack Obama as the new president of the United States has added new political appeal to the transatlantic agenda. Yet post cold-war initiatives to deepen transatlantic economic integration, and they have been many, have largely failed to achieve anything substantial. This paper discusses new approaches to transatlantic economic integration. It examines the trade benefits from a removal of tariffs and surveys different designs of a transatlantic trade deal.

In this paper, we analyze the problem of congestion and quality loss of data transmission through the Internet from an economic perspective. We show that due to the congestion problem, quality sensitive services are likely to be crowded out by high volume but less quality sensitive applications in a strict neutral system. This crowding out reduces the availability of services and the development and diffusion of innovative and high value services. Not least, the congestion problem causes welfare loss. As we discuss in this paper, the differentiation of data packets according to their quality sensitivity could remedy the congestion problem. Appropriate business models that incorporate quality of service concepts could be very efficient in preventing the crowding out of high value quality sensitive services without affecting other applications and would be very convenient for Internet users at the same time. We show that any ex ante regulation in the sense of strict Net neutrality could seriously harm the development of innovative business models and discourage innovation and investment.

During the last two decades, the world has experienced a remarkable process of disinflation, with average inflation rates in industrialized countries falling by 10 percentage points and an even sharper decline of the mean rate of inflation in developing countries. Parallel to the decline in inflation rates, a tremendous increase in economic integration – often referred to as globalisation – has been taking place. In this article, we analyse the effects of globalisation on inflation in OECD countries. We theoretically outline different channels through which globalisation may have influenced inflation dynamics and give an overview on the existing empirical evidence on this issue. In the empirical analysis we show that globalisation has contributed to the disinflation process in OECD countries since the 1980s. Inflation rates became much less prone to domestic parameters, especially the domestic output gap. Global factors such as the output gap of the main trading partners became more important in determining national inflation rates. Furthermore, economic freedom and the degree of globalisation are positively related to the disinflation process. Central bank independence seems to have contributed to the decline in inflation rates among OECD countries process, but the effect is rather modest. Though the inertia of inflation can still be observed, the persistence of inflation has considerably declined since the early 1990s.

In recent years, China has become a major power on the African continent, not only with respect to trade and investment, but also as a donor of development aid. Although there is no accurate measure of the exact size of China’s aid program, since China rather underestimates the volume in official statistics, estimates on the basis of press releases, official announcements and assessments of major projects in Africa suggest that China has already overtaken the World Bank in lending to Africa. In this article, we analyze China’s aid policy in Africa from a political economy perspective. We show that China is using (tied) aid and loans in order to reach specific economic and political goals and that Beijing has been quite successful in doing so. The impressing success of China in getting access to African countries can be explained by comparative advantages of the People’s Republic, especially in unstable nations and “rough” states. China’s engagement in Africa causes some serious problems with traditional donors. We discuss these conflicts and provide a critical assessment of China’s role in Africa. Finally, we discuss the policy implications for the donor community.

In March, 2007, the Treaty of Rome celebrates its 50th anniversary. The chief lesson from this remarkable period of European cooperation is the contribution to growth and prosperity from economic integration. The common commercial policy that emerged from this treaty has had a significant impact on European economic development. Equally important, regional liberalisation in Europe spurred multilateral trade liberalisation under the auspices of the GATT and the WTO . The Kennedy Round of trade liberalisation in the 1960s, facilitating considerable tariff reductions, was partly a response to European liberalisation. Similarly, the Uruguay Round of trade negotiations in 1986-1994 gained impetus form the Single Market programme. But regional liberalisation of trade in Europe has only been partial and confined to trade in goods. The service sector represents 75 percent of European production but only 20 percent of intra-European trade. European trade in services still suffers from considerable regulations. The agricultural sector is far less important for European wealth than services, but intra-European trade is severely distorted by the Common Agricultural Policy. To honour the theme of economic integration manifested in the Treaty of Rome, Europe must put the programme of trade liberalisation back on track. The liberalisation of trade in goods 50 years ago pushed global liberalisation. Considerable reduction of barriers to trade in services and agriculture is now necessary for Europe to not become an obstacle to international trade liberalisation.

In this paper we empirically discuss the question whether or not debt relief in the past fifteen years has been economically rational. Analysing the determinants of debt relief our results suggest that governance quality did not play a role in the decision of creditor countries to forgive debt in the 1990s. Furthermore, even the actual debt burden of highly indebted poor countries had not been crucial for the decision whether or not debt forgiveness was granted. Rather, debt relief followed a strong path dependence: those countries whose debt had been forgiven in the first half of the 1990s were also granted debt forgiveness in the second half of this decade. However, this allocation pattern changed at the beginning of the 21st century, when the path dependence became less strong and at least some dimensions of governance quality have been taken into account by donor countries.