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Can biofuels reduce poverty and tackle climate change?

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Leo Peskett
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Biofuels have been hailed as a solution to climate change and a way to reduce poverty. Some researchers argue that by successfully entering the biofuel market, developing countries can create jobs, boost incomes and so increase food security. However, are biofuels sustainable in environmental, social or economic terms?Research from the Overseas
Development Institute in the UK explores the arguments and evidence around claims
that biofuels can play a role in poverty reduction.
Biofuels can be produced from
specially grown crops, from multi-use plantations, or as a by-product of other
agricultural activities. The two main types are bioethanol, which is made from
sugar or starch crops, and biodiesel, which is made from vegetable oils.
Bioethanol has been in production for longer and
accounts for most global production, with Brazil and the USA the main producers.
The European Union is the main producer of biodiesel. The production of both is
increasing steadily, with many more countries becoming involved.
The impacts on poverty of
increased biofuel production are hard to predict, because they depend on a
range of factors, which vary greatly between countries. Potential impacts
poverty reduction
through employment: some biofuel production systems require significant labour
production tends to be large scale, so it may not be easy for small, poor
farmers to organise themselves to access biofuel supply chains
increasing demand
and pressure for biofuels may reduce poor people’s access to land
using land to
produce biofuels instead of food could affect food security, through decreased food
availability, increased prices and less food aid from USA grain surpluses (as
they will instead be used for biofuels).
Increased biofuel production
is likely to have differing effects, both internationally and within countries.
For example, if oil prices continue to rise, the demand and prices for biofuels
are likely to increase as well. This will be good for producers, but less so
for consumers: countries such as Brazil will benefit, while importing countries
in sub-Saharan Africa will see prices rise. Within countries, agricultural
producers will see increased incomes, but those who rely on energy imports will
be worse off.
With so many uncertainties
over global markets and price fluctuations for fuel and staple foods, it is not
possible to make general predictions over the sustainability of biofuels. With
this in mind, the researchers make the following recommendations:
Each country must
consider its own suitability for biofuels, in terms of available infrastructure
for production and transport, human resources, food security and energy regulations
(for example the sale of energy to the national grid).
Data should be
collected globally on food stocks and the prices of fuel and staple foods.
These could be used for food security early warning systems.
Climate change
mitigation funds should be used to identify and support the cleanest biofuel
production techniques.