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.

In this report, we seek to meet the specific objectives of the first phase of China's study. The key goal of this study in China is to prepare evidence-based policy advice concerning the implications and opportunities for fruit producers during a period of a boom in horticulture demand and a restructuring of downstream markets and commercialization. Hence, the research in Phase 1 concentrates on identifying the determinants and consequences of restructuring of the horticulture sector in China. The analysis is conducted on three levels: macro (the policy issues and the national business environment), meso (the different chain segments and villages) and micro (household level). Because of space limitation and timing of the research the linkages between the first two levels are analysed in this report. The micro study will be carried out during the upcoming phase.

The research for this report is structured into two parts: a.) the national-meso level and b.) the local-meso level. In part 1 key policy issues, broad fruit supply chain issues and key stakeholders are identified. This part is intended to set the stage for the analysis done in part 2 and the forthcoming household study. The goal of part 1 is to analyze the evolution of China's restructured supply chain at a national level over a period of the past 10 or more years. With this background, the objective of part 2 is to study in more depth the restructuring changes that are occurring inside China's rural communities and within the markets. It also will provide context for the forthcoming micro-level study. In particular, we primarily study how marketing supply chains are operating and evolving within villages; inside wholesale markets and inside supermarkets.

An accurate estimate of carbon fluxes associated with tropical deforestation from the last two decades is needed to balance the global carbon budget. Several studies have already estimated carbon emissions from tropical deforestation, but the estimates vary greatly and are difficult to compare due to differences in data sources, assumptions, and methodologies. In this paper, we review the different estimates and datasets, and the various challenges associated with comparing them and with accurately estimating carbon emissions from deforestation. We performed a simulation study over legal Amazonia to illustrate some of these major issues. Our analysis demonstrates the importance of considering land-cover dynamics following deforestation, including the fluxes from reclearing of secondary vegetation, the decay of product and slash pools, and the fluxes from regrowing forest. It also suggests that accurate carbon-flux estimates will need to consider historical land-cover changes for at least the previous 20 years. However, this result is highly sensitive to estimates of the partitioning of cleared carbon into instantaneous burning vs. long-timescale slash pools. We also show that carbon flux estimates based on 'committed flux' calculations, as used by a few studies, are not comparable with the 'annual balance' calculation method used by other studies.

The supermarket revolution has arrived in China and is spreading as fast as or faster than anywhere in the world. As the demand for vegetables, fruit, nuts and other high valued products has risen, urban retailers are handling increasingly more of these high value commodities. The experience of many developing countries suggests that there could be serious distributional impacts of the emergence of supermarkets. And, in China, as elsewhere in the world, there is concern among policy makers and academics that poor, small farmers might be excluded from the market for horticulture commodities.

The main goal of our paper is to understand what types of farmers have been able to participate in the horticultural revolution, how they interact with markets and how supply chains affect their production decisions and incomes. We also want to understand if (and if so, then how) the rise of supermarkets have changed supply chains. Our analysis uses spatially sampled data from 200 communities and 500 households in the Greater Beijing area and supplemented by data collected in Shandong Province, China's fruit and vegetable basket. In contrast to fears of some researchers, we find small and poor farmers have actively participate in the emergence of China's horticulture economy. Moreover, there has been almost no penetration of modern wholesalers or retailers into rural communities. We also conducted surveys and interviews in wholesale markets and with procurement agents in Beijing supermarket chains and document the fact that supply chain shifts have only affected the downstream segments of food markets and China's wholesale markets (midstream in the food supply chain) are only being affected marginally.

In an editiorial printed in Science magazine, aquaculture specialist Rosamond Naylor comments on the impact of the newly introduced National Offshore Aquaculture bill which establishes a permitting process for offshore aquaculture development within federal waters of the exclusive economic zone (EEZ) and encourages private investment in aquaculture operations, demonstrations, and research.

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.