Rush To Biofuels Threatens To Cause Food Shortages
The current trend toward increased biofuel production may cause food shortages and damage to biodiversity without having much beneficial impact in reducing greenhouse gases and displacing fossil fuels. These are the discouraging findings of a Background Paper released this week by the Organization for Economic Cooperation and Development.
The paper, prepared by Richard Doornbosch and Ronald Steenblik for the OECD Round Table on Sustainable Development, does not necessarily reflect the official views of the OECD and asks whether biofuels offer “a cure that is worse than the disease they seek to heal.”
Global production of biofuels amounted to roughly 1% of total road transport fuel consumption and up to 11% of total demand for liquid fuels in the transport sector could technically be satisfied by biofuels by 2050. The paper says it is likely that land-use constraints will limit the amount of new land that can be brought into production leading to a“food-versus-fuel” debate. Any diversion of land from food or feed production to production of energy biomass will influence food prices from the start, as both compete for the same inputs. Research Recap in July highlighted an earlier OECD/FAO report that biofuels demand could push up agricultural prices.
The conclusion must be that the potential of the current technologies of choice — ethanol and biodiesel — to deliver a major contribution to the energy demands of the transport sector without compromising food prices and the environment is very limited.
Key Findings of the Paper:
- The growth of the biofuels industry is also likely to place pressure on the environment and biodiversity. Biomass feedstocks can be most efficiently produced in tropical regions, where suitable and available land is mostly concentrated, and annual yields are highest. However, as long as environmental values are not adequately priced in the market there will be powerful incentives to replace natural ecosystems such as forests, wetlands and pasture land with dedicated bio-energy crops, thus harming the environmental credentials of biofuels.
- Even without taking into account carbon emissions through land-use change, among current technologies only sugarcane-to-ethanol in Brazil, ethanol produced as a by-product of cellulose production (as in Sweden and Switzerland), and manufacture of biodiesel from animal fats and used cooking oil, can substantially reduce greenhouse gases compared with gasoline and mineral diesel. The other conventional biofuel technologies typically deliver reductions of less than 40% compared with their fossil-fuel alternatives. When such impacts as soil acidification, fertilizer use, biodiversity loss and toxicity of agricultural pesticides are taken into account, the overall environmental impacts of ethanol and biodiesel can very easily exceed those of petrol and mineral diesel.
- In only a very few countries do biofuels have the potential to make a significant dent in dependence on imported oils. The amount of fossil fuels that can be displaced by domestic production of biofuels will be small in the great majority of countries.
- An augmented biofuels market will tend to increase the positive relation between oil prices and biofuel costs. Higher oil prices will both raise the production cost of biofuels (as fossil fuels are an important input in the production process) and exert upward pressure on agricultural commodity prices as a result of the increased demand for them. This limits the possibility for biofuels to reduce transport fuel prices.
The Working Paper can be downloaded at no charge here.
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