Food versus Fuel

An Informed Introduction to Biofuels

Frank Rosillo-Calle, Francis Johnson, Frank Rosillo-Calle, Francis Johnson

• Publisher: Zed Books
• Year: 2013
• Print ISBN: 9781848133839
• eBook ISBN: 9781780320243
• Edition: 1
• Topic: Economics
• Subtopic: Economic Conditions
• Index: Economics

Food versus Fuel presents a high-level introduction to the science and economics behind a well-worn debate, that will debunk myths and provide quality facts and figures for academics and practitioners in development studies, environment studies, and agricultural studies. Compiled by an internationally renowned scientist and authority, and to include perspectives from 'pro' and 'anti' biofuels experts and activists, from the North and South, the aim of this book is to bring a balanced approach to the current debate on the major issues affecting the development of biofuels in a concise and clear manner in order to provide an informed, nuanced but accessible introduction, grounded in science and economics rather than conjecture and controversy.

1 Food versus Fuel: Setting the Scene

Frank Rosillo-Calle and Jeff Tschirley

As the twenty-first century settles on its course, energy security concerns, high oil prices and growing international commitment to address climate change have sparked significant interest and investment in renewable energy resources. Particular emphasis has been placed on liquid biofuels, which are seen as a means to reduce greenhouse gas emissions from transport, contribute to rural development, and reduce costly dependence on imported oil. Some countries also see biofuels as a way to exploit their comparative advantage in agriculture and increase their export earnings. Needless to say, the demand for bioenergy is likely to influence agriculture strongly in the foreseeable future.

A political and scientific debate, particularly with regard to the potential negative social and environmental impacts of bioenergy production, has been taking place for several years and was intensified during 2008 by spikes in agricultural commodity prices. The areas of greatest concern have been impacts on food security, land competition and indirect land-use change; lower-than-expected greenhouse gas benefits from some biofuel feedstocks; biodiversity and sustainability impacts; and market distortions caused by subsidies.

There is a role for an informed, nuanced and accessible source, grounded in science and economics rather than conjecture and controversy. The aim of this book is to bring a balanced perspective to bear on the major issues affecting the development of biofuels in order to facilitate a more informed debate among academic and professional specialists as well as the general public. This book explores the wider implications associated with the multi-faceted nature of biofuels and the multiple purposes that generally lie behind support for biofuels.

This chapter sets the scene for those that follow by reviewing the major issues in the food versus fuel debate, to be examined later in greater

detail. We review the positions of various biofuel interest groups; examine some of the moral dilemmas; and assess how issues such as food prices, land use, subsidies, and greenhouse gases may influence the outcome in the current drive towards greater use of renewable energy sources.

The biofuel debate has centred around three major dilemmas: (1) whether biofuel production and use lead to – or imply – a choice between food and fuel; (2) whether biofuels have positive or negative effects for climate change and the broader environment; and (3) whether biofuels contribute to socio-economic development, wealth generation and distribution.

The ‘food versus fuel’ debate is not new (e.g. Rosillo-Calle and Hall, 1987; FAO, 1999) but intensified in recent years when a number of factors converged. Among the driving forces were policy decisions in the EU and US to increase their use of biofuels significantly and provide incentives for their production. The response by the private sector and a number of developing countries was strong; the result was an expanding bioenergy market, but environmental and social concerns rapidly emerged. During 2007 and 2008, as the global economy was undergoing significant and widespread changes in the scale and geographical scope of supply and demand, spikes in many commodity markets occurred, including soaring prices for key agricultural commodities such as maize, rice and wheat.

The sharp increase in food prices has been attributed to a combination of factors and the specific influence of biofuel production is widely recognized, even if the magnitude of the impact is still a matter of debate.¹ However, the rapid transition towards biofuel use, primarily in the US and EU, was seen by many as the root of the problem. Growing concern was expressed by some international organizations (FAO, 2007; Royal Society, 2008) as well as non-governmental groups (Doornbosch and Steenblik, 2007);² Kutas et al., 2007; Koplow, 2007) over a rapid rush to biofuels that failed to take the full risks into account. Their concern was reinforced by studies that questioned the overall greenhouse gas benefits and the availability of land to support biofuel feedstock production.

Much of the criticism has been focused on ‘first-generation’ biofuels dependent on technologies likely to be used for at least the next decade,

until ‘second-generation’³ technologies start to become more widespread. But there has also been a failure to understand fully the potential economic implications that such a significant additional demand for biofuel feedstocks places on agricultural commodity prices and human wellbeing.

Factors such as transport costs of feedstocks, infrastructure requirements, land availability and rapid growth in demand from some developed countries are significant in economic terms. However, developing countries in the tropics, which have a comparative advantage in producing biomass and biofuels due to favourable climatic conditions, face other challenges – land tenure rights, food insecurity and limited infrastructure, to name just a few – that constrain their efforts to enter the biofuel marketplace.

Government policy in a number of OECD countries was implemented without sufficient analysis of the environmental, social and economic effects. Furthermore, dialogue between the countries that would import biofuels and those that would produce them was minimal. This led to unrealistic assumptions and expectations. In this sense, the current debate is relevant but somewhat premature – as the world confronts a significant financial downturn and practical reality begins to take hold, the costs and benefits of biofuel production will be seen from a different and more practical perspective than they have to date.

The simplistic manner in which the popular press has portrayed biofuels as a ‘food versus fuel’ issue has neglected complex interactions with factors such as climate change, livelihoods and development goals;⁴ misconceptions and misunderstandings among academics, policy makers and the wider public have flourished.

The benefits and risks of biofuels are highly context-specific – a system that is sustainable in one country does not necessarily work in a neighbouring country. Biofuel systems are as diverse as the feedstocks and agro-ecosystems from which they are produced. Each system has its own pros and cons. It is also essential to recognize that renewable energies will provide only a fraction of global energy needs during the next few decades; the biofuel portion will be even more limited. While bioenergy needs to be produced on a sustainable basis, claims that it

can provide the bulk of transport fuel demand lack a solid economic foundation.

Thus it is important neither to overstate the potential contribution of biofuels nor to underestimate the environmental and social impacts. Overestimates of potential create unrealistic expectations and less effective incentives. A misrepresentation of impacts can result in the imposition of stringent requirements that place biofuels at a disadvantage in comparison with fossil fuels, thus hindering rather than enhancing their development.

A stronger link between agriculture and the demand for energy could contribute to higher agricultural prices, output and domestic income. The development of biofuels could also promote access to energy in rural areas, further supporting economic growth and long-term improvements in food security. At the same time, higher food prices could threaten the food security of the world’s poorest people in urban areas, many of whom spend more than half of their household incomes on food. Demand for biofuels could place additional pressure on the natural resource base, with potentially harmful consequences, particularly for people who already lack access to energy, food, land and water. These issues are covered in greater detail in Chapters 5 and 6.

The pro- and anti-biofuels arguments

There are two main schools in the biofuels debate, whose arguments we summarize here. The anti-biofuels lobby (see Pimentel et al. in Chapter 2) maintains that:

• Large-scale production of biofuels will lead to food insecurity worldwide.

• Increasing food prices will disproportionately affect the poorest people in developing countries.

• Land competition, including indirect land-use change, will increase as competing demands for food and non-food products intensify, leading to deforestation, ecosystem destruction and loss of biodiversity.

• Many of the social and environmental benefits of biofuels are not yet fully proven.

• Large-scale biofuels production will increase soil erosion, putting stress on water resources and other ecosystem services.

The pro-biofuels lobby (see Cortez, Regis and Sinkala in Chapter 3) argues:

• There is sufficient land available to produce both food and a reasonable portion of biofuels (5–20 percent of transport fuels demand) without affecting food supply.

• Food-insecure countries that do not have their own fossil fuel reserves pay a significant portion of their national income in dollars for imported oil. In such cases, biofuels are a good alternative to fossil fuels and would free up foreign exchange for other investments.

• More than 2.5 billion people have little or no access to modern energy systems. Developing-country agriculture and rural areas need more energy in absolute terms; bioenergy availability can actually enhance food production.

• Multi-functional agricultural production systems already exist in many countries; these systems can or do contribute to overall welfare by providing food and non-food products in a sustainable and socially balanced manner.

• The social, economic and environmental benefits of biofuels can thus outweigh potential negative impacts if good management practices are applied.

Produce food or fuel?

Since its inception, modern agriculture has produced a variety of both food and non-food products. Biofuel feedstocks are in many respects simply one more agricultural product. Most farmers seek to maintain a viable livelihood; they are less concerned with what they produce than with whether they can make a reasonable economic return. The production of natural fibres, plant-derived pharmaceuticals and chemicals, non-edible oils, and starches and sugars are further examples of agricultural products (see also Chapter 7).

Biofuels offer qualified farmers⁵ the opportunity to produce a new or existing crop for a purpose which can diversify their on-farm income. However, some people find it unethical to use land in food-insecure countries to produce biofuels that benefit mostly wealthy people, when almost one billion of the world’s people are chronically under-nourished. Leaving aside the issue of whether this ethical position is too simplistic, we need also to recognize that the reasons people go hungry are many and complex; they usually have little to do with food or land availability, but rather with poverty and income inequality. It is also relevant that, given the right conditions (financing, markets, skills, et cetera), farmers can consistently deliver far more food than is generally assumed.

Climate change and greenhouse gases

One of the greatest challenges currently facing humankind is the potential impact of climate change (see Chapter 6). What role might biofuels play, positive or negative, in addressing this challenge? The answers depend upon many factors such as positive contribution to GHG, energy balance, the specific feedstock (such as sugarcane or maize) and the circumstances of production and processing (see Royal Society, 2008).

Some analysts have long questioned the energy balance (Pimental et al., Chapter 2) while the GHG benefits of biofuels have been further questioned by critics who cite the influences of land-use change on carbon benefits (Fargione et al., 2008; Searchinger et al., 2008). However, it is important to distinguish the case for biofuels made from starch and grain crops (such as corn or wheat) in temperate climates from the case of biofuels made from highly efficient tropical crops like sugarcane; the latter have significantly better energy balance and greenhouse gas benefits (see Cortez, Regis and Sinkala in Chapter 3).

It is also important to consider that energy and GHG balances are constantly changing as they are the focus of significant technical efficiency improvement efforts. In the case of corn, a study by Darli...

Table of contents

• Cover
• About the editors
• Title
• Copyright
• Contents
• List of Tables and Figures
• List of Abbreviations
• About the Contributors
• Introduction
• 1 Food versus Fuel: Setting the Scene
• 2 Why We Should Not Be Using Biofuels
• 3 Why Biofuels are Important
• 4 Agriculture and Land Use Issues
• 5 The Role of Biofuels in Promoting Rural Development
• 6 Biofuels and Climate Change
• 7 Future Trends in Biomass Resources for Food and Fuel
• 8 Food versus Fuel: Concluding Remarks
• Notes
• Index