Monitor Vol 39 08_Final_Nov08.pdf - tips

More documents

Recommendations

Info

environmental policy 45 Biofuels, agriculture and poverty reduction 1 Trade & Industry Monitor By Leo Peskett 2 , Rachel Slater 3 , Chris Stevens 4 and Annie Dufey 5 1. Introduction Sweeping claims have been made about the role of biofuels in development and poverty reduction (see Peskett et al, 2007 for a review). For example, it has been argued that • • • energy crops are beginning a green revolution in Brazil; a bioproduct-based agro-revolution can offer a new development paradigm; biofuels can provide a solution to the twin problems of poverty and climate change; and • countries in the tropics have comparative advantage in biofuels production which can play a role in job creation and food security. 1 This paper was first published in the Overseas Development Institute’s (ODI’s) Natural Resource Perspectives Series (June 2007), which presents accessible information on current development issues (www.odi.org.uk). ODI is the UK’s leading independent think tank on international development and humanitarian issues. The research on which this paper is based was funded by the Renewable Natural Resources and Agriculture Team of the UK Department for International Development (DFID). The arguments made in this paper are those of the authors alone and are not necessarily those of DFID. 2 Leo Peskett is a Research Officer at the ODI, working with the Rural Policy and Governance Group, focusing on climate change issues. Email: l.peskett@odi.org.uk 3 Rachel Slater is a Research Fellow at the ODI, working with the Rural Policy and Governance Group. Email: r.slater@odi. org.uk 4 Chris Stevens is the Director of Programmes of the International Economic Development Group at the ODI. Email: c.stevens@odi.org.u 5 Annie Dufey is a Researcher in the Sustainable Markets Group at the International Institute for Environment and Development. Email annie.dufey@iied.org The development of biofuels has generated vigorous debate on economic and environmental grounds. Our attention here is on its potential impacts on poverty reduction. The potential is large, whether through employment, wider growth multipliers and energy price effects. But it is also fragile: it will be reduced where feedstock production tends to be large scale, or causes pressure on land access, and its success can be undermined by many of the same policy, regulatory or investment shortcomings as impede agriculture. Whilst some of the factors facilitating, and impacts of, biofuels can be tracked at global level, its distributional impacts are complex, and point to the need for country-by-country analysis of potential poverty impacts.
Environmental policy 46 Trade & Industry Monitor But there is also scepticism. Researchers have recently questioned whether the net energy benefits of biofuels production may be negative for many crops because their energy outputs are less than the fossil energy inputs required to produce them. Others (see Peskett et al 2007) suggest that biofuels will be a ‘pandora’s box’ and question whether large-scale biofuel production can be environmentally, socially and economically sustainable and efficient. This paper does not consider the broader questions about biofuels and energy policy, nor their environmental implications, but is concerned mainly with their potential contribution to agricultural sector development and to rural growth and poverty reduction. Biofuels are defined here as organic primary and/or secondary fuels derived from biomass which can be used for the generation of thermal energy by combustion or by other technology. They comprise both purposegrown energy crops, as well as multipurpose plantations and by-products (residues and wastes) (FAO 2000). This paper focuses on two types of liquid biofuels produced from purpose-grown crops: • Bioethanol is an alcohol derived from sugar or starch crops (e.g. sugar beet, sugar cane or corn) by fermentation. Ethanol can be used in either neat form in specially designed engines, or blended with petroleum fuel. • Biodiesel is derived from vegetable oils (e.g. rapeseed oil, jatropha, soy or palm oil) by reaction of the oil with methanol. Biodiesel can either be burnt directly in diesel engines or blended with diesel derived from fossil fuels. 2. Trends in Production and Trade Production of biofuels for domestic use and export is dominated by a few countries. Bioethanol, production of which began in the 1970s, is still produced in much larger volumes than biodiesel for which production started in the 1990s. The USA and Brazil are the largest producers of bioethanol by a large margin (Figure 1). The EU produces almost 95% of the world’s biodiesel. Global production has increased gradually over time. The largest increases in production volumes are expected in Brazil, the US, the EU, China, India, Indonesia and Malaysia, with annual global production of bioethanol projected to increase to 120 billion litres by 2020, and that of biodiesel to 12 billion litres (IEA 2004). Figure 1: Top five ethanol producers worldwide (% of global production) USA 39% Rest of the World 14% France 2% India 4% China 8% Brazil 33% Source: Based on figures from RFA 2007
Page 1 and 2: TIPS T R A D E & I N D U S T R Y M
Page 3 and 4: TIPS Executive director: Stephen ha
Page 6 and 7: trade policy 1 Why OECD countries s
Page 8 and 9: Table 1: EU and U.S. Examples of Re
Page 10 and 11: Table 3: Preferences and Utilizatio
Page 12 and 13: The third result implies that the s
Page 14 and 15: where “NAFTA markup” is the per
Page 16 and 17: exports toward already high levels
Page 18 and 19: in a multiregional trade model. Des
Page 20 and 21: value added in least developed econ
Page 22 and 23: 11. The decline in exports to the p
Page 24 and 25: trade policy 19 Global Trade Models
Page 26 and 27: depending on whether or not the dat
Page 28 and 29: Although these three studies examin
Page 30 and 31: countries are vulnerable to trade s
Page 32 and 33: OECD data, Gurgel et al. (2006) sho
Page 34 and 35: The credibility of CGE models will
Page 36 and 37: 9th Annual Conference on Global Eco
Page 38 and 39: industrial policy 33 Industrial Pol
Page 40 and 41: 1991-2004 when South Africa’s per
Page 42 and 43: of clothing and textiles 14 . These
Page 44 and 45: will need to be embodied in new wel
Page 46 and 47: Second, the constraints imposed by
Page 48 and 49: Edwards, L. and Lawrence, R. (2006)
Page 52 and 53: By 2011 around 20% of Brazilian bio
Page 54 and 55: 5. Starving the People to Feed Cars
Page 56 and 57: In policy terms, improving the bene
Page 58 and 59: environmental policy 53 Commerciali
Page 60 and 61: (PMS) with ethanol and help cushion
Page 62 and 63: The low levels of modern (commercia
Page 64 and 65: oil. Efforts are in place to establ
Page 66 and 67: since it is the first barrier that
Page 68 and 69: plant size. The optimum plant size
Page 70 and 71: the local environment). On the posi
Page 72 and 73: 15 World Bank, world development in
Page 74 and 75: environmental policy 69 Climate cha
Page 76 and 77: individual African countries are re
Page 78 and 79: Table 3: Fossil fuel production and
Page 80 and 81: The re-injection process is estimat
Page 82 and 83: References 1 IPCC, 2005, IPCC Speci
Page 84 and 85: food policy 79 Rising food prices:
Page 86 and 87: But food prices have risen since th
Page 88 and 89: 9. The Medium-term Response Rising
Page 90 and 91: food policy 85 The World Food Situa
Page 92 and 93: Figure 1: World cereal production,
Page 94 and 95: trade liberalization and the integr
Page 96 and 97: Supply and demand changes do not fu
Page 98 and 99: Figure 9: Brazil: Ethanol and sugar
Page 100 and 101:
Great technological strides are exp
Page 102 and 103:
Figure 12: Modeling the actual pric
Page 104 and 105:
Figure 14: Changes in the Global Hu
Page 106 and 107:
4. The acute risks facing the poor
Page 108 and 109:
OECD (Organisation for Economic Co-
Page 110:
105 10. Currently, the Monitor is d
show all

Monitor Vol 39 08_Final_Nov08.pdf - tips

Create successful ePaper yourself

Delete template?

Save as template?