Raise the Hammer

One HUGE problem there ASmith. Most cars can't use biofuels. Combine that with the lack of availability and the fact that cars which can run on biofuels ie. diesels and those who've been "converted" are generally more expensive than the average gas vehicle and you've got the reason why people don't use biofuels.
Also, we're indirectly forced to use a vehicle of some sort simply because the design or lack thereof of the city we live in is so poorly regulated and has created major sprawl which strains the transit system. I can't take a bus to my work and I only live 5 kms away. I can't bike without nearly getting killed. I can't walk because there are no sidewalks past halfway. SO ya, we aren't forced to buy a car but it turns into the only viable option pretty quickly. As far as the desire for suburban types of housing, speaking for myself (I live in an 11th floor apartment) I don't like apartment living because it's outdated and poorly developed. Things always break down, I can't take a shower without getting burned or frozen, ventilation doesn't work properly, there's no green bin program, i can't do my laundry whenever i want... do I have to keep going? When the concentration has been on sprawling suburban development, technological advancement and pure engineering know-how gets directed there causing a lack of it in other areas.
You're last paragraph shows the lack of logic in your argument for what I'll call anarchy... Someone has to say that you're doing physical harm to another and punish you. If that turns out to be the person you're harming, society turns violent and there's a rise of arbitrary justice enforced by ppl who believe that they've been directly wronged when they may or may not have been. In that case, government is required to regulate and ensure that justice is served. Just because some governments are bad doesn't mean all government is bad.