The Sugarcane Complex in Brazil

The initial research puzzle is explained in this chapter as well as the reasons for conducting this specific research. An explanation is given for the rise of biofuels and their importance within current commercially viable alternative energies and reasons why they are still contested are presented. Beginning with the fact that the availability of energy can be considered as essential for human needs as the provision of food, water and shelter, the effects of commercial-scale biofuel production on rural development, agriculture and the environment are illustrated in more detail. This chapter provides an overview on why emerging and developing countries that have a strong agricultural resource base might promote biofuels. These countries anticipate a potential to generate and secure rural labor and promote rural development. Furthermore it is concisely explained why it is crucial to consider the competition for agricultural land between food crops and crops for energy purposes. The environmental impacts of biofuel production and consumption are discussed that need to be taken into account when biofuels are subsidized and promoted by governmental regulations. This chapter concludes with the presentation of three research questions that represent the common thread for the overall structure of the text at hand.

The theoretical chapter looks at the concept of sustainability with regard to the main objectives of biofuel policies while it considers the importance of innovation and technological development in order to reach a transition towards sustainability and sustainable mobility. The Environmental Kuznets Curve is quoted in order to explain technological optimism with regard to innovations which imply that a transition towards sustainability can be reached. Different strands of economic research are concisely presented in order to identify a theoretical framework where innovation is put at the center of attention. Evolutionary economic theory is hereby considered as the most applicable approach that provides an explanation for technological development and innovation. Different concepts that reflect on the importance of innovation and technological change are subsequently presented. The strong connection between institutional economics and evolutionary economic theory is referred to in detail in especially with regard to the concepts of innovation systems. The technicalities and attributes of Technology Innovation Systems are introduced as the concept of Energy Technology Innovation System (ETIS) is being introduced and further elaborated upon. The feature of product/process level and institutional level analysis that provides comprehension of physical technologies and social innovations is explained in more detail since the ETIS concept is applied to the analysis of the Brazilian sugarcane complex.

The third chapter starts with an explanation as to why the Brazilian sugarcane complex was selected as the case study and how the field studies were realized. Within this chapter the research design and the methodological approach are discussed and a method set in order to structure and apply the data is compiled and analyzed. Since there is no single conclusive final methodological principle as argued by a variety of economists and other social scientists, methodological pluralism is needed. Because the research focuses on innovation and technological developments as well as on the dynamic aspects of the sugarcane complex a qualitative approach is considered adequate. The dynamic nature and the reflexive, empathic and holistic character of qualitative research speak for a qualitative approach with the aim of understanding people and their opinions and not just to measure them. Qualitative research is however time- and cost-intensive and objectivity, validity as well as reliability are difficult to provide. Thus quantitative approaches or as in the case of this research, descriptive statistics and numerical data are included in order to check and review the results of qualitative research. The concept of triangulation which implies research within multiple methods and from different perspectives is referred to within this chapter in order to elucidate the advantages of combining research approaches. Thus methodological pluralism, the integration of qualitative and quantitative research approaches, is advocated within this chapter.

Initially an explanation is given for how the expert interviews were conducted and structured within this main empirical chapter. The strategy for identifying the experts that were interviewed is elaborated upon the evaluation of the recorded and transcribed interviews by applying qualitative data analysis software is explained followed by a presentation of the reasons for the success of sugarcane over decades and centuries and its significance for the Brazilian agriculture and rural areas. From the initial governmental program Pro-Álcool to the recent crisis of the sugarcane sector the last three decades are explained in more detail. Yet the main focus of Chap. 4 is the empirical analysis of the data compiled. The qualitative data is presented as statements from the expert interviews and then matched with insights, statistical and other data from the literature review. With reference to the innovation system approach there are five ‘physical’ technologies (mechanization; cogeneration; new technologies; second generation biofuels and genetically modified cultivars) that are analyzed in detail. An assessment of the ‘social’ technologies with a national and international perspective (institutions, strategies and politics; laws, regulations and enforcement; industrial cooperation; concentration and internationalization; certification and market demand) follows. Subsequently these technologies and innovations and their interdependencies are evaluated in order to understand whether the sugarcane complex can be classified as an innovation system. The chapter concludes with analysis of the impacts of innovation on ecological, economic and social aspects in order to cover the multi-dimensionality of sustainability.

In this last chapter the initial research puzzle and the resulting questions are recapitulated and ultimately answered. The mechanisms and reasons for the success of the Brazilian sugarcane complex are being illustrated. ‘Agricultural Processes’ followed by ‘Geopolitics of Energy’ and ‘Markets’ are identified as the areas that are considered most dynamic within the sector in order to answer the first research question. With respect to the second research question, the most important one regarding the depth of empirical analysis, it can be concluded that the sugarcane complex passes for an innovation system. The assessment of the physical technologies and innovations identified feedback loops between different technological stages and technologies and the resulting possibilities of cascade utilization as the most important arguments for an innovative and progress promoting industry. The varieties of products that are likely to be realized and a huge potential (inter)national market demand which can be expected also speak for the sugarcane complex. The strong support of governmental institutions in Brazil mirrored in the deployment of demand-pull and supply-push mechanisms additionally strengthens the innovation system. Answering the final research question: it can be stated that the sugarcane complex as an innovation system does not automatically promote a transition towards sustainability. The response towards expansion and increasing demand for sugarcane-based products is crucial. Unrestrained expansion would result in palpable negative effects. Nevertheless, the benefits of providing biofuels, electricity and other products and thereby reducing GHG emissions are significant.