Biofuels: promises and constraints

Dec 2006

Concerns about energy supply, national security, climate change, and economic development crowd the public policy agendas of most countries around the world and dominate international dialogues. Political instability in many oil exporting countries threatens the steady supply of fossil fuel to importing countries, while diminishing oil reserves cause more environmentally damaging techniques to be employed in order to extract oil from less accessible sources. Both these factors, along with the rising demand for energy from the developed world, combine to raise oil prices, thus creating a significant drain on foreign exchange in developed and developing countries alike. Concurrently, the expanding use of energy increases greenhouse gas emissions, adding to the destructive effects of climate change.
Into the fray of these diverse and cross-cutting issues steps biofuels. In this ordinary product, different countries and constituencies find potential answers for their utmost concerns. In the United States, national security advocates think biofuels will facilitate energy independence from unstable, unreliable sources. Signers of the Kyoto Protocol, such as the European Union and Japan, view biofuels as a tool towards meeting their emission reduction goals; environmentalists also are supportive for this reason. For farmers, biofuels represent a new market and a way to diversify risk. Developing countries hope these products will be new export commodities, and both developing and developed countries see them as an opportunity to keep expenditures on energy within the domestic economy.
Of course, an energy source that could single-handedly address energy supply constraints, climate change, national security, and economic development issues would be too good to be true, and indeed, the beneficial aspects of biofuels’ ability to address these diverse demands are countered by their own issues related to food security and economic and environmental sustainability. The promises of biofuels must be weighed against their costs. This paper seeks to put forward the potential benefits of biofuels as well as their plausible drawbacks to present a thorough overview of policy issues related to biofuels.
Woven into most aspects of the debate on biofuels is the issue of sustainability. Is there enough land to produce food and fuel? Will cultivation choices be made in ways that foster the continued fertility of the land? Is investing in a biofuels industry the best use of resources to sustain rural livelihoods or create new jobs? Questions such as these, regarding the sustainable production of biofuels, have so far only been alluded to. But these issues are critical to assessing the true viability of biofuels.

By: K. Laney (International Food & Agricultural Trade Policy Council)

 
download this document:   587 kb
home