Are biofuels doing more harm than good? It is a question that stays on the agenda, and I ask my readers to provide their views and facts. This week’s discussions at Doha remind us that tackling climate change can be as complex as it is important.
One such complexity relates to the unintended, negative consequences of well-intended solutions such as biofuels - one of the most divisive and controversial environmental policies.
This is a subject that I have written about several times before on this blog and one that I will be debating next week at the European Parliament during a high level discussion organised by the International Institute for Sustainable Development.
The event, entitled A Global Perspective on Biofuel, specifically aims to explore state-supported biofuels with a view to developing a ‘politically feasible, economically expedient and environmentally sound mix of policies’ based on the experience of major biofuel producers, particularly those in the European Union.
Taking each of these three dimensions – the political, the economic and the environmental - in turn goes some way to revealing why the problem with biofuels is so multi-faceted. This is also well summarised in the report Cultivating Governance: Cautionary tales for biofuel policy reformers, sponsored by Nestlé and published to coincide with the event.
Firstly, from a political standpoint, there can often be a ‘mismatch’ between a given government’s “officially adopted objectives” for supporting biofuels through subsidies and blending mandates, and the ‘Realpolitik’ that sits behind it. This disconnection can arise from acting in the ruling party’s self-interest by using subsidies to gain political support among key groups necessary for a government’s survival, such as rural constituencies or “green” alliances, which in some cases have been strengthened by virtue of collecting subsidies together.
This ‘mismatch’ can also emerge from governments’ misguided attempts to act in what it considers to be the national interest by using subsidies to support domestic agriculture against international trade.
Yet economically, this approach can backfire since subsidies are by definition national, whereas markets are increasingly global. As a result, biofuels produced in the EU are often less competitively priced than those produced in the United States or developing countries. Countries can consequently find themselves producing more biofuel than can either sell or consume.
However, the most worrying consequences of a global biofuel policy guided by Realpolitik concerns its negative environmental and social impacts. As I have written previously, up to 9,100 litres of water are required to produce one litre of biodiesel, according to a study of the US Department of Energy. With increasing pressures on freshwater use, and the vital role played by water in growing food crops, this is not only astonishingly inefficient but immoral. The impact of biofuel subsidies on food is further aggravated by country mandates. In the US, for example 40% of corn production now goes towards ethanol.
One effect of this is to push up food prices, or in the words of the report, to “stage a unique experiment [that tests] existing relationships in the commodity markets”. But this relationship is not one we can afford to experiment with, since food is not a commodity like rubber or copper; it is a vital staple on which people depend for survival.
Moreover, since a higher share of staple food in diets correlates with people on lower incomes, it is typically poorer consumers that are most severely affected by rising food prices (Peter Menzel and Faith d’Alusio; Hungry Planet; Material World Books, Napa/Cal. 2007).
All these reasons highlight the fact that biofuels are not a ‘first-best’ option for mitigating climate change. They are at best a second-rate solution, creating deeper problems than they alleviate.
To deepen our understanding of the full range of these potential impacts, further research is required.
However, the Precautionary Principle, which is binding for all countries that have signed and ratified the Rio Declaration on Environment and Development, states that "when an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause-effect relationships are not fully established scientifically". Up to now, it appears that the precautionary principle has been more often applied against the interest of the socially weak (Golden Rice, DDT).
Therefore, as we continue to collect further evidence of the unintended consequences of biofuels, we should not forget our obligations to good governance nor abandon our pursuit of better alternatives to tackling the challenge of global warming.