6.3. Biofuels policy issues related to economic development and environmental sustainability

1. 6.3. Biofuels policy issues related toeconomic development and environmental sustainability Brent Swallow and Henning Baur, ICRAF

2. Objectives • To identify the key opportunities and challenges of biofuels • To identify some of the implications for investments in the forestry sector

3. Potential benefits from biofuels • Increased energy availability & security • Reduced greenhouse gas emissions • Increased incomes for biofuel and food producers • Increased employment and economic development in rural areas

4. International bio-energy markets developing fast • Excitement • Opportunities for importing and exporting regions • Entrepreneurs and policy now deal with a rapidly evolving international context • Concerns • Fierce debate on sustainability • Different interests & perspectives on governance & policy • Vulnerable stage, current energy regime still firmly entrenched

5. Water? • A large-scale expansion of energy crop production would lead to a large increase in evapotranspiration appropriation for human uses • Need to consider restrictions from competing demand for water resources Source: Berndes 2002

6. What about cheap food for the cities? • low food prices have helped keep rural populations poor, and have worked to prevent improved productivity • These poor people will benefit from the higher food prices that the increased demand associated with biofuels is causing • Urban poor suffer • Must boost staple food productivity to protect urban poor • Increased value for rural products can help many rural poor

7. A historical moment? • Current crisis in overshooting the global carrying capacity requires bold action • fast • challenging • Bioenergy offers a huge opportunity • sustainable land use + rural development + energy substitution + climate change mitigation

8. A possible biofuels future? 1/2 • 100 EJ* from forest and agricultural residues and organic wastes • 100 EJ from restoration schemes on degraded lands • 200 EJ from good quality land released due to higher efficiency in agriculture *EJ=exajoule= 1018 joules.

9. A possible biofuels future? 2/2 • +/- 400 EJ is an expected 1/3 of the worlds future energy needs • Represents a trillion US $ market value worldwide • With appropriate increases in food productivity, would involve about 20% of agricultural and pasture land

10. Biofuels policy challenges • Energy regime change • Increasing returns on investment, global convergence, dialogue, investment priorities • GHG balance, chain performance (30-80%+) • Land access and use • Competition with food • Biodiversity • Well being and livelihoods • Standards and certification

11. A kind of conclusion • Energy transition needed: from fossil to flow • Biofuel production is still at a immature stage • Government policies ahead of the science. • The potential of first generation biofuel limited. Second-generation biofuels in 10 - 15 years. • Biofuels can substitute for some of the present energy imports • Conservation, fuel efficiency, new technologies, must be part of a serious and concerted effort by governments, academia, and the private sector to devise a post-petroleum future.

12. A major research and development effort is needed in both public and private sectors Key objectives include among others: • increased yield per hectare of feedstock while reducing negative environmental impacts; • development of new feedstocks that can, for example, be grown in more hostile environments, be more readily processed and be capable of generating a variety of products; • increasing resource use efficiencies; • ensuring equitable profits; • improved methods of processing, in particular for lignocellulosefeedstocks; • internationally agreed methods of assessing sustainability

13. Thank you for your attention