Financial incentive programs for biofuels: A policy analysis of California's alternative fuel incentive program

California's Alternative Fuel Incentive Program is a state policy to promote alternative fuels, including biofuels, in order to reduce greenhouse gas emissions and fossil fuel dependence. The program provides grants to help developers establish new biofuel facilities. The objective of this thesis is to analyze whether the program supports truly "green" projects. The thesis argues that the program needs to adopt instruments at the project approval stage that would help ensure that the selected projects advance the program's goals while avoiding future socially and environmentally adverse impacts.;Biofuels offer the potential to reduce greenhouse gas (GHG) emissions relative to fossil fuels. They also, however, present a risk of adverse social and environmental impacts. Financial incentives can play an important role in promoting "green" investments, but because biofuels present risks as well as benefits, simply promoting biofuels will not ensure a positive outcome. Biofuel programs should be strengthened with certain assessment and governance tools that could help them to avoid the potential adverse impacts. The thesis identifies in the California Alternative Fuel Incentive Program needed improvements to its project approval process and its monitoring system. The thesis concludes that the program could develop greener investments by (i) requiring, during the approval phase, certain assessments to capture the potential adverse impacts of biofuels, (ii) improving its monitoring system to measure those impacts, and (iii) improving transparency to better communicate to the public and stakeholders.