This review provides a timely summary of the current understanding of the various impacts and contributes positively to the policy debate. We have several key conclusions:(1) Biofuels are diverse and evolving; (2) Greenhouse gas (GHG) benefits vary significantly across various types of biofuels and are dependent on market conditions and policy situation; (3) Increase in income in the developing world would increase the demand for both food and fuel; (4) A diverse set of policies, which has been introduced or proposed, impacts biofuels directly; and (5) Much of the impact assessments of biofuels thus far are exante estimates based on either optimization or equilibriummodels. The shortterm economic impacts of biofuels will depend on a variety of factors such as the harvest in any given year, the oil price, economic growth, strength of thedollar, and level of inventory. The longterm impacts will depend on factors such as investment in technological change, pop¬ulation and economic growth, climate change, and long-term policies toward energy, agriculture, and the environment. The biofuel policy debate is likely to be an ongoing one in the near future.