IFPRI’s biofuels research links food systems and their supporting ecosystems to the global energy economy and the processes of global change. Quantitative analysis connects the growing demand for renewable energy to policy-driven patterns of biofuel production and trade. The goal is to understand the implications for agriculture land and water use and the availability and price of food and feed commodities, and determine what this means for poor people in developing countries. Energy-use trends are examined along with other important drivers of global change, such as climate and socioeconomic growth, to better understand their economic and environmental consequences. These trends are also analyzed to target and design policy reforms and strategic investments to alleviate poverty and malnutrition and improve rural livelihoods more effectively.
Global Scenario Analysis and Tools
Scenario-based analysis improves understanding of biofuel growth within the wider context of global environmental and economic changes. By considering alternative trajectories of the key socioeconomic drivers that determine the growth of income, population, and energy demand, IFPRI evaluates the range of possible outcomes that might arise as the demands for food, feed, and fuel products compete for available supply. This analysis identifies important sources of uncertainty and provides the basis for policy recommendations.
Since the early 1990s, IFPRI has used the International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT) to examine the effects of water availability and climate change on the global food supply, demand, trade, prices, and food security. IMPACT is a key component in IFPRI’s scenario analysis of biofuels, and has been used in a number of empirical studies.
Several models have been used together with IMPACT to develop and analyze projections, and land-use models are being developed to examine the trade-offs between agricultural and non-agricultural land use activities. Researchers in IFPRI’s Globalization, trade, and markets theme are using their global computable general equilibrium (CGE) model, MIRAGE, to analyze biofuel policies, and are looking at the structure of ethanol and biodiesel trade regimes and the implications for land markets and other sectors of the global economy.
Drawing on an array of household-level data for various countries, IFPRI is looking at the micro-level impacts of biofuels. These include the effects that changes in food prices have on household food consumption and nutrition, as well as the implications that cheaper, cleaner forms of energy have for household welfare. Some key issues relate to designing biofuel production systems that integrate rural households into the value chain, creating on-farm value addition for smallholders beyond the extraction of raw biomass, and whether or not countries should begin producing biofuels using first-generation processes (such as corn or sugarcane ethanol) or wait for new ligno-cellulosic technologies to emerge.
In collaboration with Stanford University and the Center for Chinese Agricultural Policy, IFPRI is studying the potential for biofuels production in India, Mozambique, and Senegal through the Biofuels and the Poor project. The project is examining the pathways through which rapid growth in biofuels and changes in related markets might affect household welfare, and is connecting detailed, global-level scenarios of energy and agricultural markets with country-level agricultural and development policies. The goal is to better understand the implications of biofuel production for human well-being and environmental sustainability.
An ongoing study in Southeast Asia is examining the likely impact of biofuel expansion on forest resources and as a result, what the most effective policy interventions would be. In Latin America, a regional IFPRI study has derived indicators of biofuel production potential and future impacts. The potential benefits and constraints of biofuels growth in East Africa are also being assessed.
Linkages with Food System Analysis
Biofuels production has become an important player in the global food system as it diverts resources and crop output from food (agricultural) to non-food (non-agricultural) uses. As a result, the linkages between energy and food systems have strengthened, with important implications for food security in developing countries and the welfare of the poor. IFPRI’s global change research seeks to improve the analysis of global food systems to better characterize the drivers of food demand and the constraints faced by food production systems. The research aims to improve understanding of the scope for technological and policy interventions to improve human welfare. The analytical framework highlights important links between food systems and the environment and accounts for nonagricultural land uses and other sources of external stress on natural resources. By creating links to innovative science and policy programs and research networks, this research program seeks to improve the science behind the analysis of food systems and their functioning.
IFPRI’s analysis of the potential impacts of first-generation biofuels on agricultural economies, agricultural market prices, food security, and poverty has generated a great deal of awareness of the links between first-generation biofuels production growth and human well-being. Given the intense interest in the world food situation and the rapid changes in consumer prices for food and energy, much scrutiny has been given to the possible connection between agricultural market conditions and policy-driven measures, such as country-level biofuel programs. IFPRI’s work has provided estimates of the strength of these linkages and a starting point for other researchers and organizations to undertake their own analysis—particularly with regard to the impact on poverty, food security, and malnutrition, which are among the primary indicators in IFPRI-based simulations.
While there is a wide range of estimates that attributes the impact of biofuels on world food prices, depending on modeling assumptions, points of reference, and definition of price measures, there has nonetheless been a lively and constructive dialogue and discussion to better understand the linkages between food and energy production systems and the role of policy in determining future outcomes. FAO’s 2008 State of Food and Agriculture report summarizes some of the discussion and contains useful references to other work. Along with FAO and other human well-being and development-focused organizations, IFPRI has made considerable contributions to the debate on food and energy security, and where the complementarities and trade-offs between those goals might lie.
- Stanford University
- Center for Chinese Agricultural Policy
- Centre d’études prospectives et d’informations internationals (CEPII)
- University of Kassel, Center for Energy Systems Research