Voltaire's "Candide" found an 18th century solution to the problems of the world: Cultivate the garden. Researchers are now developing a more advanced response: Cut the grass.

The International Energy Agency, the research institute in Paris that advises major oil-consuming nations, says that it expects strong demand and the difficulty in finding oil that is easy to pump from the ground will continue to support high oil prices. Rising oil prices add to inflation, and burning oil raises carbon dioxide emissions which many countries have promised to reduce. With oil this summer nudging toward $80 a barrel, interest in biofuel has gushed. Biofuel crops take in carbon dioxide when they grow, offsetting the greenhouse gases released when the fuel is burned. A rise in biofuel production could cushion the economic shocks caused by spiking oil prices.

Yet current biofuel initiatives carry their own baggage. Crops used to make biofuel, like corn, soybeans or sugar cane, need a lot of land, and crop prices are being pushed up by biofuel demand.

Production of biofuels has increased sharply over the past several years, amounting to the equivalent of nearly 26 million tons of oil in 2005, the agency estimates. Yet it still is equal to just 1 percent of global consumption of transportation fuel. "We think biofuels can play an increasingly important role in slowing down transportation-related oil demand growth," Fatih Birol, the energy agency's chief economist, said during an interview. "But given the constraints we are facing we don't think biofuels will dramatically change the game in the oil business."

Besides the limitations imposed by land requirements and costs, indecision is another enemy of biofuels. "In the case of biofuels, different carmakers, fuel companies, and governments have different ideas about what should be done," said Lars Nilsson, a professor of energy systems studies at Lund University in Sweden. "There is no common vision." Still, that has an upside.

"Biofuel is a really hot topic," said Andre Faaij, an associate professor with the Copernicus Institute at Utrecht University in the Netherlands, who studies energy supplies. "From an expert point of view, this is by far the most excitement and rapid development I have even seen in the renewable energy field." In the United States, the largest producer of biofuel, corn is the preferred starting point, receiving millions of dollars in investment. In Brazil, the preferred crop is sugar cane. Brazil has been investing in research and development for 30 years to reduce its dependence on imported oil, Birol said.

Ethanol, the alcohol-based fuel derived from sugars and starches, now powers about a third of its transportation, compared with less than 5 percent in America.

Yet both the United States and Brazil may be investing in the wrong process. In February, the European Commission urged EU countries to develop large-scale production of more advanced "second generation" biofuels derived from wood and other cellulose fibers. A paper issued by the commission aims to help the European Union meet a 2010 target of raising biofuel use in transportation to 5.75 percent of the market from about 2 percent last year. The International Energy Agency is backing the push to research and develop second generation technology based on low-cost and abundant cellulose feedstocks like grass, straw, sawdust, and wood cuttings from fast-growing trees.

The agency, in its annual World Energy Outlook report to be published in November, will say that this "could allow biofuels to play a much larger role in the world's energy needs," according to a copy of the report seen by the International Herald Tribune. Nilsson, the professor at Lund University, and Faaij, of Utrecht University, also said they believed that a healthy future for green fuels called for a dietary shift in the feed stock more fiber, less starch.

Faaij said that agricultural stock for biofuel "is expensive and not efficient." Harvesting grass or fast-growing trees like willows is sustainable and efficient because they are "far less intensive crops with minimal emissions and positive impacts on soils," Faaij said.

The Earth Policy Institute, which is based in Washington and promotes an environmentally sustainable economy, has said that growing, transporting, and distilling corn to make a gallon of ethanol uses almost as much energy as is contained in the ethanol itself. "If ethanol is to become a major part of the world fuel supply without competing with food and forests, its primary source will not be grains or even sugar crops," said a report it issued last year. "It will be more-abundant and land-efficient cellulosic feedstocks, such as agricultural and forest residues, grasses, and fast-growing trees." "Promising new technologies are being developed that use enzymes to break down cellulose and release the plants' sugars for fermentation into ethanol," it said.

Researchers said one of the main obstacles to biofuel was land availability. Using more land for biofuel production means land likely would have to be taken from agriculture, forests or urban development, leading to higher prices for land and crops. But agricultural residues, like corn stalks, wheat straw and rice stalks, are often left on the field or burned. Collecting just a small portion of these leftovers could yield nearly 15 billion gallons, or 57 billion liters, of ethanol, four times the current output, with no additional land demands, the institute said.

Two second-generation technologies for treating cellulose fibers are close to market application, Birol and Faaij said. One process, enzymatic hydrolysis, produces sugar from wood or grass feedstock, which can then be processed into ethanol. The other process, gasification, can turn the feedstock into fuels like synthetic diesel or methanol.

Both routes should make it possible, when developed and used on a large scale, to produce high-quality biofuels that will be competitive with gasoline and diesel at a price of about $40 to $50 a barrel, without subsidies, Faaij said.

"The point is that the second-generation biofuels require further technology development and that may take another 10 years or so," Faaij said. "The new generation of technologies emerging will really tip the balance."