can biofuels be sustainable in an unsustainable agriculture? daniel g. de la torre ugarte chad m....
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Can Biofuels be Sustainable in an Can Biofuels be Sustainable in an Unsustainable Agriculture?Unsustainable Agriculture?
Daniel G. De La Torre UgarteDaniel G. De La Torre Ugarte Chad M. HellwinckelChad M. Hellwinckel
American Chemical Society
236th National Meeting and Exposition
August 17-21, 2008
Philadelphia, Pennsylvania, USA
AGRO
OutlineOutline
The state of agriculture when biofuels took-off
• Prices, development, poverty
• Greenhouse gases emissions
Potential role of biofuels
Agriculture and PovertyAgriculture and Poverty Developing world
5.5 billion people
2.5 billion are in households involve in Ag
1.5 billion are smallholder households
800 million people food insecure
80% of food insecure people are in rural areas
In many developing countries:
>50% of employment
>25% of GDP
Increase in GDP from Ag is twice more efficient for poverty reduction than any sector
Long term trend in Long term trend in agricultural commodity pricesagricultural commodity prices
0
50
100
150
200
250
300
350
1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007
Pri
ce In
dex
Nominal Real
Source: International Financial Statistics Online, IMF February 10,2008. Except for real price in 2007, which is estimated by author.
30+ years of declining and or flat prices & declining investment in agriculture
Biofuels Expansion took-off when Biofuels Expansion took-off when world inventories were decliningworld inventories were declining
0.00
0.06
0.12
0.18
0.24
0.30
0.36
Per
cen
t o
f to
tal u
se
Corn Wheat Rice
Source: USDA
Global Anthropogenic GHG EmissionsGlobal Anthropogenic GHG Emissions
Source: Fourth Assessment Report, IPCC (2007)(a) Global annual emissions of anthropogenic GHGs from 1970 to 2004. (b) Share of different anthropogenic GHGs in total emissions in 2004 in terms of CO2-eq. (c) Share of different sectors in total anthropogenic GHG emissions in 2004 in terms of C02-eq (Forestry includes deforestation.)
0.26% Searchinger, et al.GHG for ag and forestry is to address the 31% of annualemissions coming. If we take care of this we take care of
The story thus far:The story thus far:
Agricultural commodity prices went from depressed to walking on a “razor’s edge”
Biofuels are “the straw that broke the camel’s back
Current industrial agricultural system is not sustainable; biofuels sustainability largely depend on the way feedstock are produced
Today’s agricultural economic, environmental, and social problems are not caused but exacerbated by biofuels.
Biofuels are not Biofuels are not The SolutionThe Solution to to ( (but could contribute to)::
Climate Change
Energy crisis
Economic development / Poverty
Reduction
The Question isThe Question is
Under which conditions biofuels can be an opportunity for:
Poverty reduction
Climate change / environmental
benefit
Energy crisis / energy independence
Strategy for Poverty ReductionStrategy for Poverty Reduction
o Increase farmers ability to capture larger share of higher prices:• Invest in farmers’ access to markets, improving
marketing & distribution systems• Improve product quality
o Democratize access to land, water and productive resources
o Invest in research and extension to improve productivity to supply the now profitable local market with local crops
o Implement programs to ensure access to food for vulnerable population
Trade off Between Agricultural Trade off Between Agricultural Prices and Food SecurityPrices and Food Security
Ag Prices
% Food Security
P0
P1
Increase in ag. prices is not necessarily abad for food security, specially if coming from low prices
Expand the Impact of Higher Expand the Impact of Higher Prices in Food SecurityPrices in Food Security
Ag Prices
% Food Security
P0
P1
Investments directed to improve share of high prices capture by farmers and reduce cost to consumers would improve food security
A
B C
Ag Prices
EnvironmentalCost
Trade-off Between Agricultural Prices Trade-off Between Agricultural Prices and Environmental Costand Environmental Cost
P0
P1Under current agricultural practices and food consumption patterns, an increase in ag prices could accelerate environmental costs
Strategy for Climate ChangeStrategy for Climate Change
o Drastically change diet composition towards more efficient sources of protein and food from local origin
o Invest in Research & Extension oriented to:• Reduce use of fossil based inputs in agriculture• Improve management practices which increase the
environmental performance of production agriculture• Ensure the best use of soils and landscape
o Recuperate the complementarity of crop and livestock activities in the farm
o Integrate GHG emissions and other environmental impacts into farmers balance sheet
Ag Prices
EnvironmentalCost
Trade-off Between Agricultural Prices Trade-off Between Agricultural Prices and Environmental Costand Environmental Cost
P0
P1Under current agricultural practices and food consumption patterns, an increase in ag prices could accelerate environmental costs
Ag Prices
EnvironmentalCost
Higher Ag Prices Create Conditions to Higher Ag Prices Create Conditions to Invest in reducing Environmental CostInvest in reducing Environmental Cost
P0
P1
Investment in agricultural technologies less intensive in fossil inputs, and in tune with local soil and food habits would reduce environmental cost of agriculture
C
A
BD
Biofuels Expansion StrategyBiofuels Expansion Strategy
In check with Ag production capacityPrioritize domestic/local market Mandates should not drive growth but
secure healthy bottomIncentives must be linked to:
Environmental performanceContribution to rural development
Sustainability criteria should play a key role in the development of the sector
Concluding RemarksConcluding Remarks
If nothing is done, missed opportunity for poverty reduction, agriculture, and climate change
Biofuels could result in a massive transfer of resources to the ag sector, specially in the South.
Biofules provides the profitability to invest in agriculture and radically change what, how, and where we produce
Countries could benefit from biofuels without producing them
Department of Agricultural Economics, Institute of AgricultureUniversity of Tennessee http://www.agriculture.utk.edu/
Agricultural Policy Analysis Centerhttp://agpolicy.org/
ThanksThanks ! !
Bio-based Energy Analysis Grouphttp://beag.ag.utk.edu/