biofuels, the global food balance & impacts on the poor
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Mark W. Rosegrant, Director Environment and production Technolgy Division (EPTD) at the International Food Policy Research InstituteTRANSCRIPT
Friday, April 7, 2023
Biofuels, the Global Food Balance & Impacts on the Poor
Mark W. RosegrantDirector
Environment and Production Technology Division
Bold Actions for Stimulating Inclusive Growth An international dialogue organized by IFPRI and hosted by EMBRAPA
Brasilia, Brazil, June 2, 2010
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Outline
Biofuels and Agriculture
Biofuels and Food Security
Challenges and Opportunities
BIOFUELS AND AGRICULTURE
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
MIRAGE CGE based analysis of Biofuels: the EU mandate
Focus of the study: Effects of the EU mandate Multi country, Multi sectoral Dynamic CGE Focus on Indirect Land Use Change The core story
New Demand
for Crops
Increase in yield Increase in area• Extension of crop land• Reduction of other crops
Hunger? Substitution effect
Feed Other sectors (agrifood,
cosmetics) Substitution effects
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Defining a Central Scenario
First step: Having a reasonable dynamic baseline– Energy policies, Agricultural policies, Trade policies (e.g.
Antidumping/Countervailing duties on US biodiesel in the EU)
Policy uncertainties– Trade policies
• Status quo
• Full liberalization of biofuel (not feedstocks) in the EU
– Level of Mandate• 5.6% - Fuel consumption for road transportation in the EU
• 316 Mtoe in 2020: Total EU consumption for Road Transportation
• 31.6 Mtoe of renewable energies: 10% target
• 17.8 Mtoe of biodiesel first generation by 2020Compared to the current situation: 9.23 Mtoe in baseline 2008 (3.3%)
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Food price changes (% compared to the baseline in 2020)
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Regions REF Mandate 5.6%
Mandate 5.6%+ Trade
liberalization
Lev (Mtoe) Lev (Mtoe) Var (%) Lev (Mtoe) Var (%)
Brazil 28.51 32.78 14.97 34.36 20.50
CAMCarib 7.25 7.45 2.64 7.19 -0.89
China 10.81 10.83 0.18 10.83 0.16
EU27 0.84 2.17 156.89 0.44 -48.23
LAC 0.69 0.69 0.95 0.70 2.21
RoOECD 5.66 5.78 2.03 5.84 3.03
RoW 1.51 1.50 -0.54 1.50 -0.49
USA 29.10 29.57 1.64 29.72 2.14
World 84.38 90.77 7.58 90.57 7.34
Biofuels Production: Ethanol
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Agricultural Production (2020)
Crops Region REF Mandate 5.6% Mandate 5.6%+ Trade
liberalization
Lev (1,000
tons)
Lev (1,000
tons)
Var
(%)
Lev (1,000
tons)
Var (%)
Sugar_cb Brazil 913,385 1,001,556.15 9.65 1,045,492.08 14.46
Rapeseed CIS 571 583.00 2.06 583.42 2.13
PalmFruit Brazil 3,117 3,196.06 2.53 3,181.86 2.07
Rapeseed Brazil 151 153.15 1.59 152.85 1.39
Rapeseed SSA 108 108.87 1.10 108.89 1.12
Sunflower Brazil 153 155.23 1.24 154.91 1.03
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010. Global trade and environmental impact study of the EU biofuels mandate. European Commission. http://www.ifpri.org/publication/global-trade-and-environmental-impact-study-eu-biofuels-mandate
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Agricultural Value-Added (2020)
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010. Global trade and environmental impact study of the EU biofuels mandate. European Commission. http://www.ifpri.org/publication/global-trade-and-environmental-impact-study-eu-biofuels-mandate
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Real Income Impacts (2020)
REF Mandate 5.6%Mandate 5.6%+ Trade
liberalization
Lev (US$ bil) Lev (US$ bil) Var (%) Lev (US$ bil) Var (%)
Brazil 856 857 0.06 857 0.08
CAMCarib 444 444 -0.01 444 -0.02
China 4,593 4,592 0.00 4,592 -0.01
CIS 1093 1,091 -0.18 1,091 -0.17
EU27 15,182 15,184 0.01 15,182 0.00
IndoMalay 564 564 -0.02 564 -0.03
LAC 1,605 1,604 -0.05 1,604 -0.06
RoOECD 8,590 8,589 -0.01 8,588 -0.01
RoW 5,639 5,633 -0.11 5,633 -0.11
SSA 912 911 -0.12 911 -0.12
USA 15,219 15,218 0.00 15,218 -0.01
World 54,697 54,687 -0.02 54,684 -0.02
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010. Global trade and environmental impact study of the EU biofuels mandate. European Commission. http://www.ifpri.org/publication/global-trade-and-environmental-impact-study-eu-biofuels-mandate
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Cropland Expansion by 2020
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010. Global trade and environmental impact study of the EU biofuels mandate. European Commission. http://www.ifpri.org/publication/global-trade-and-environmental-impact-study-eu-biofuels-mandate
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Where does Land Expansion Occur?
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010. Global trade and environmental impact study of the EU biofuels mandate. European Commission. http://www.ifpri.org/publication/global-trade-and-environmental-impact-study-eu-biofuels-mandate
EU 27
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Carbon Balance Sheet (2020)
REF
Mandate
5.6%
Mandate 5.6%
+ Trade
liberalization
Total carbon release from forest biomass
(MtCO2eq) 43.41 46.07
Total carbon release from organic carbon in
mineral soil (MtCO2eq) 63.09 71.66
EU Consumption of biofuel in 2020 (million GJ) 443 743 746
Annual carbon release from forest biomass
(gCO2eq/MJ) 7.23 7.61
Annual carbon release from organic carbon in
mineral soil (gCO2eq/MJ) 10.50 11.84
Annual direct savings (gCO2/MJ) -60.55 -66.38
Total emission balance on a 20 years period
(gCO2/MJ) -42.82 -46.93
Source: Al-Riffai, B. Dimaranan and D. Laborde. 2010.
BIOFUELS AND FOOD SECURITY
news.mongabay.com/.../2007_11_25_archive.html
http://www.ifad.org/newsletter/images/sp_1008/Bioenergy1.JPG
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Biofuels and Food Security Scenarios
Base Scenario: US fulfills only half of its 2022 goal of biofuels production under the 2008 Energy Independence and Security Act (EISA).
US Biofuels: US fulfills goal of 56 billion liters of maize-based ethanol under EISA
US Biofuels plus crop productivity growth: Incorporates additional yield growth needed for cereals to offset the effect on child malnutrition of moving from the base case to US Biofuels
Page 15
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Change in International Prices between Base and US Biofuels Scenario in 2025
Maize +25%
Sugar +11%
Oilseeds +18%
Wheat +8%
Cassava +10%
Page 16
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Per Capita Calorie Availability Implications of Biofuels Scenarios
Sub-Saharan Africa: -5% decrease in calorie availability due to the biofuels policy -importance of maize as a staple food in that region
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Malnutrition Impacts of US Biofuels Target
Malnourished children (0-5)
Quantify extra yield growth needed to move from here….
…back to here….
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Additional Yield Growth in Cereals to Offset Malnutrition
Global Cereal Yield Growth
Additional (annual average) yield growth in cereals:Developing world = 0.8%Developed world = 0.4%
CHALLENGES AND OPPORTUNITIES
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There will be a “food-versus-fuel” trade-off if:
• Innovations and technology investments in crop productivity are slow
• Reliance is placed solely on conventional feedstock conversion technologies to meet future blending requirements (or displacement) of fossil fuels with biofuels
Improvement in biofuel conversion and crop productivity improvements reduce trade-offs
Biofuels increase profitability of crop breeding for productivity improvement in biofuel feedstock crops
Challenges and Opportunities
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Reducing the Trade-offs
Reduce OECD subsidies and mandates for biofuels; liberalize trade in biofuels
Develop production processes for liquid biofuels that bring benefits to the poor
• Need to design production systems that will integrate rural households into the value chain
• Allow for on-farm addition of value, rather than just extracting raw biomass
• ‘First generation’ processes for producing biofuels compared with emerging ligno-cellulosic technologies?
Broad-based investment in agricultural research and rural infrastructure
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Conclusions
Impacts of global biofuel development and growth on rural poor
• Likely to be mixed and farming system-specific – both positive and negative – warrants careful assessment
Common set of conditions for promoting rural development and enhancing socio-economic growth and biofuel capacity
Expand consideration of biofuels beyond transportation uses to take into account actual energy demand of the poor
CORE BUSINESS: Should stay focused on rural socio-economic growth and development, agricultural research and productivity enhancement