Governing Biofuels: A Principal-Agent Analysis of the European Union Biofuels Certification Regime and the Clean Development Mechanism

As a key actor behind the emerging global biofuels market, the European Union has introduced environmental regulations governing such products. This article analyses the biofuels 'meta-standard' certification scheme which creates a transnational governance regime involving a regional bloc including States, non-governmental organisations and businesses in a hybrid regulatory model combining elements of private certification and public authority. A comparison of the role of Designated Operational Entities in the Kyoto Protocol's Clean Development Mechanism (CDM) and the certification schemes in the EU sustainability regulatory regime demonstrates that the problems that threaten the environmental integrity of the CDM are less likely to emerge in the EU biofuels context.