Global demand for and the production of biofuels continues to grow as a result of a several key factors, mostly driven by the policies of developed countries, especially the Organization for Economic Co-operation and Development OECD member countries. These policies are based on efforts to:

  • Promote energy security. Biofuels can satisfy domestic energy needs in the face of rising oil costs and expensive import bills for fossil fuels.
  • Reduce greenhouse gas emissions. Biofuels are a source of clean, renewable energy.
  • Boost national agribusiness sectors. Producers of key biofuels feedstock crops are set to benefit.

Because not all of these goals are mutually compatible, policy makers confront tradeoffs between promoting domestic agriculture and reducing greenhouse gases.

The result of this push for biofuels is clear: cropland used to produce feedstocks for first-generation biofuels has increased dramatically over the last decade, significantly impacting the agricultural landscape and global food and feed markets. Governments can craft well-designed biofuels programs that lead to positive impacts, including technology spillovers that help food production and raise agricultural wages and income. However, biofuels could also have negative effects on environmental quality –primarily related to changes in to the use of land and natural land cover to accommodate additional biofuels feedstock production. This land use change increases stress on water resources and habitats and accelerates the release of soil carbon into the atmosphere, potentially undermining efforts to reduce greenhouse gas emissions that many governments hope to achieve through the use of renewable fuels and alternative energy sources, like biofuels. These unintended, knock-on effects of expanding biofuel production are among the issues that policymakers and analysts are currently dealing with in order to promote the ‘green’ attributes of renewable fuel programs and avoid conflicts between long-term energy security and environmental sustainability.

IFPRI on Bioenergy

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