P. MORONE* AND F. GOVONI
Unitelma Sapienza University of Rome, Bioeconomy in Transition Research GroupViale Regina Elena 295, 00161, Rome, Italy
1.1 Introduction
Europe is confronted by the depletion of natural resources due to, among other issues, their unsustainable use, increased global competitiveness, the global population growth rate, and other challenging environmental and economic issues.1 Promoting the sustainable growth of dynamic bioeconomy sectors will contribute to the transition from a fossil fuel-based society to an innovative, resource-efficient and competitive one. Biobased products represent a great opportunity to reconcile sustainable long-term growth with environmental protection through the wise and forethoughtful use of renewable resources for industrial purposes. However, managing those resources in a sustainable manner implies the addressing of major social, economic and environmental challenges and facing the potential risks associated with direct and indirect land use change as well as competition with the food industry.2 Bearing this in mind, to steer the transition process along the desired sustainable pathway, specific policy and strategies should be designed to define a supportive regulatory structure.3
To this aim, several sectoral policies and strategies have been developed in order to support the establishment of a comprehensive and effective policy framework for a biobased economy in Europe. In this sense, we can recall: the Common Agricultural Policy; the 2013 EU Forest Strategy; the Common Fisheries Policy; the Blue Growth Agenda; and the European Innovation Partnership for Agriculture. Along with sectoral policies, the European Union has also adopted a series of horizontal policies affecting different value chains of the bioeconomy and supporting the transition toward a resource-efficient and low carbon economy. To this end, the following can be mentioned: the Europe 2020 strategy; the Lisbon Agenda; European Circular Economy Package; the COP21 Paris Agreement; the 2030 Climate and Energy Policy; the Lead Market Initiative; the European Bioeconomy Strategy and Action Plan; the Innovation Europe Flagship Initiative.
In addition to strategies and policies, regulatory tools like standards and certification schemes can further support the establishment of a sustainable bioeconomy. Standards and certifications play a central role in promoting innovation activities by reducing perceived uncertainty and prompting the market uptake of new products. The role of standards is especially relevant in markets characterised by a high degree of uncertainty – such as the biobased market – stemming from the technological domain as well as social and environmental realms.4
In this respect, the development of comprehensive sustainability schemes and assessment tools for biobased products represents a first fundamental step towards the design of such standards and certification schemes, contributing to a clear and evidence-based view of environmental, economic and social impacts of biobased products and assisting policy makers in shaping their policy agenda. In this regard, the identification of new and effective ways of bridging the gap between scientists and policy makers is crucial to encourage the development, implementation and an effective management of the evidence-informed regulatory frameworks,5 reducing in turn the uncertainty associated with the development of a radically new economic model.
Bearing this in mind, this book presents research results obtained within the Horizon 2020 project STAR-ProBio, aimed at promoting the development of sustainability schemes (including standards, labels and certifications) for the assessment of biobased products, which are considered fundamental to the establishment of a cutting-edge sustainable bioeconomy. The book is a collection of six chapters (plus an introductory and a concluding chapter), which cover a range of issues spanning from upstream and downstream environmental assessment, techno-economic assessment, social assessment, to crosscutting issues such as indirect land use change (iLUC) and end-of-life options.
In this introductory chapter we propose an overarching framework of analysis to grasp the impact that sustainability schemes and sustainability assessment tools can play in reducing uncertainty and promoting the transition towards a bioeconomy – making sense of the research conducted in the following six chapters as pieces of a complex puzzle which need to be considered unitarily in order to achieve the desired goal.
The remainder of this introduction is organised as follows: a theoretical discussion, reviewing the concept of uncertainty associated with the bioeconomy, is provided in Section 1.2; in Section 1.3, the proposed uncertainty map is offered to the reader as a red thread linking the six main chapters composing the book; Section 1.4 presents concluding remarks.
1.2 Proposed Framework of Analysis: Science–Policy and Science–Market Bridges for Reducing Uncertainty
Uncertainty is a major challenge for new economic activities as well as for already established businesses aiming to explore new opportunities. In the presence of a high degree of uncertainty, entrepreneurs might be reluctant from investing financial resources while policy makers could be discouraged from promoting a transition whose societal and environmental impacts are not clear. Hence, it is no surprise that economists have repeatedly attempted to tackle the issue of uncertainty in transition processes.
Building on the traditional definition first proposed by Frank Knight,6 uncertainty can be understood as risk that is not possible to calculate. In this sense, uncertainty differs from risk as the latter refers to a situation where the probability of the alternative outcomes (or alternative states of the world) is either known ex ante or can be reliably estimated. Conversely, uncertainty entails the impossibility of specifying numerical probabilities for specific events. Beyond uncertainty, more often than not, obtaining knowledge about all alternative outcomes is problematic. Under this condition, economists introduced two further notions – namely ambiguity and ignorance. Following Dosi and Egidi,7 we shall refer to these four types of uncertainty (i.e. risk, uncertainty, ambiguity and ignorance) as substantive uncertainty. Another layer can be added when introducing procedural uncertainty – that uncertainty associated with the lack of cognitive competences needed to make the best possible use of the available information. In other words, under procedural uncertainty decision makers are constrained in their computational and cognitive capabilities. As argued in Morone and Tartiu,8 complex innovation systems – such as the one involving a transition to a biobased economy – are largely characterised by both substantive and procedural forms of uncertainty.
For the sake of clarity, in the context of a transition to a biobased economy, we shall reduce these areas of uncertainty to two domains of analysis. Uncertainty associated with a new biobased socio-technological regime stems from unknown internal costs and benefits (techno-economic uncertainty) as much as from unknown external costs and benefits (e.g. environmental and social uncertainty). These two domains of uncertainty affect, in turn, the market structure and the policy action.
On the one hand, a high degree of techno-economic uncertainty might prevent investors from endowing the needed resources and putting innovative activities on hold. This undermines the market potential development of the new economic activity and might ultimately prevent the transition from occurring. High degree of environmental and social uncertainty, on the other hand, would pose a constraint to policy actions aiming at stimulating the transition – since investing taxpayers’ money into a policy action whose social and environmental benefits are not fully proofed might turn to be a rather unpopular policy initiative.
1.2.1 Techno-economic Uncertainty
Following Maijer et al.,9 and elaborating on their proposed framework, we shall maintain that techno-economic uncertainty stems from the following internal sources:
- Technical uncertainty: this source of uncertainty stems directly from the lack of knowledge on the production process associated with the new technology. Typically, this refers to poor information available on the cost structure of the new technology, the availability of several concurring technological options (hence the lack of a technologically dominant design) and the stakeholders’ perception of technology (based on their knowledge, previous experiences, expectations, risk aversion, etc.). Further, uncertainty about the relation between the technology and the infrastructure within which the new technology will be integrated is also relevant. Thus, this source of uncertainty may hinder a proper assessment of the innovation and consequently postpone the innovation decision or even encourage its abandonment.
- Resource uncertainty: this source of uncertainty refers typically to the lack of financial and human resources. However, in the context of the biobased economy transition, the role of feedstock availability becomes extremely relevant. In this regard, interlinkages across different levels of the value chain become crucial involving, for instance, the cascading use of resources.
- Functionality uncertainty: this source of uncertainty is associated with products characteristics. The biobased economy is not only about producing the same products in different ways, but mostly producing new products in different ways and using different inputs. This implies a growing uncertainty related to products functionality associated with, among other things, the quality of feedstocks, the reliability of production processes, the chemical and mechanical properties of new materials, consumers’ acceptance of new product designs, etc.
These three sources of uncertainty involve two typologies of actors: producers and consumers and propagate into the locus of their interaction – i.e. the market. Hence, techno-economic uncertainty impacts on market uncertainty.
1.2.2 Environmental and Social Uncertainty
External sources of uncertainty refer to the lack of knowledge on the impact that the new socio-technological regime will have on social welfare through environmental and social externalities. In this sense, environmental and social uncertainty stems from the following external sources:
- Environmental uncertainty: this source of uncertainty relates to the lack of knowledge on the overall impact of the new process or product on the environment. Albeit the transition out of a fossil-based economy into a biobased one is undertaken with the specific aim of reducing the impact on the environment, the superiority in terms of environmental sustainability of biobased products with respect to conventional ones is not straightforward and has to be rigorously proved. This relates to the high complexity associated with the new biobased regime, which involves a plethora of variables and the associated web of causal relations (often involving complex feedback effects, revers causality and simultaneity) on a global scale. Moreover, the environmental impact should be always assessed looking at both upstream (i.e. the use of alternative feedstocks and processes) and downstream (i.e. end biobased products and their fossil-based commercial equivalents) stages of the value chain taking into consideration alternative end-of-life routes.
- Social uncertainty: this source of uncertainty relates to the lack of knowledge on the impact that the new biobased regime has on societal challenges including, among others: green jobs creation, labour conditions, rural area development, social inclusion and food security. Again, uncertainty stems from the complexity of the system and the multitude of variables involved. As an exemplification, the unforeseen food crops vs. energy crops debate has cast a shadow on the biofuel sector among researchers, analysts and policy makers as well as the general public.
- Health uncertainty: this source of uncertainty has two dimensions. On the one hand, it relates to the impact that the new biobased production system has on workers operating in possibly contaminated environments (e.g. those operating on waste valorisation plants or deali...
