A feasibility study: can Paraguay learn from the Brazilian sugarcane ethanol program?

This research investigates the feasibility of Paraguay developing a productive sugarcane ethanol sector, by drawing from the Brazilian experience with biofuels. Brazil is clearly a key case for examining whether there are certain lessons which can be extrapolated for other developing countries, such as Paraguay which have the factor endowment conditions to grow sugarcane and use it for the development of an ethanol industry. This study is framed around the following question: to what extent can the Brazilian ethanol program be replicated in Paraguay? This project’s framework for analysis is based on three categories: political and institutional arrangements that govern the value chain of ethanol in Brazil and Paraguay. These categories include: an evaluation of the multiple stakeholder’s intricately involved; the economic costs and benefits; and sustainability requirements which must be incorporated in order to credibly assess environmental gains and penalties associated with this renewable source.