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  • 8/8/2019 Evaluating Biofuels: The Consequences of Using Land to Make Fuel

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    Evaluating BiofuElsThe ConsequenCes of

    using Land To Make fueL

    tim sEarchingEr

    The German marshall Fund oF The uniTed sTaTes

    PaPEr sEriEs

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    2009 Te German Marshall Fund o the United States. All rights reserved.

    No part o this publication may be reproduced or transmitted in any orm or by any means without permission

    in writing rom the German Marshall Fund o the United States (GMF). Please direct inquiries to:

    Te German Marshall Fund o the United States

    1744 R Street, NW

    Washington, DC 20009

    1 202 683 2650

    F 1 202 265 1662

    E [email protected]

    Tis publication can be downloaded or ree at http://www.gmus.org/publications/index.cm. Limited print

    copies are also available. o request a copy, send an e-mail to [email protected].

    GMF Paper Series

    Te GMF Paper Series presents research on a variety o transatlantic topics by sta, ellows, and partners o the

    German Marshall Fund o the United States. Te views expressed here are those o the author and do not neces-

    sarily represent the view o GMF. Comments rom readers are welcome; reply to the mailing address above or by

    e-mail to [email protected].

    About GMF

    Te German Marshall Fund o the United States (GMF) is a non-partisan American public policy and grant-

    making institution dedicated to promoting greater cooperation and understanding between North America

    and Europe.

    GMF does this by supporting individuals and institutions working on transatlantic issues, by convening leaders

    to discuss the most pressing transatlantic themes, and by examining ways in which transatlantic cooperation canaddress a variety o global policy challenges. In addition, GMF supports a number o initiatives to strengthen

    democracies.

    Founded in 1972 through a gi rom Germany as a permanent memorial to Marshall Plan assistance, GMF

    maintains a strong presence on both sides o the Atlantic. In addition to its headquarters in Washington, DC,

    GMF has seven oces in Europe: Berlin, Bratislava, Paris, Brussels, Belgrade, Ankara, and Bucharest.

    About Brussels Forum

    Brussels Forum is an annual high-level meeting o the most infuential American and European political, corpo-

    rate, and intellectual leaders to address pressing challenges currently acing both sides o the Atlantic. Partici-

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    please visit www.brusselsorum.org.

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    Evaluating Biouels

    The consequences of using land to make fuel

    Brussels Forum Paper Series

    March 2009

    S*

    G M F U S

    I 3

    B C L 5

    A C L 17F Ey C

    F B P

    R 5

    * S w w G M F U S (GMF) w , y, H P Uy B j GMF, M S w - C C I E D w w

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    Evaluating Biouels

    he consequences o using land to make uel

    3

    By the end of 200

    at least ten major

    technical institutio

    had released

    highly cautionary

    to harshly critical

    reports on biofuels

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    Introduction

    1

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    Evaluating Biouels

    he consequences o using land to make uel

    5

    The dominant

    questions for

    biofuel policy

    today focus on th

    costs and benefi

    of devoting

    productive land

    to biofuels, rathe

    than to other

    human needs.

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    A. Fundamental importance of land to the

    greenhouse gas equation

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    Biofuels and the Competition

    for Land2

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    he German Marshall Fund o the United States6

    Understanding the role of land in comparing greenhouse gas emissions from biofuelsand conventional fuels

    Wy j w b

    Table 1. GREET and U.K. default values CO2 emissions for various fuels, grams (CO2 equivalent)

    per mega joule of energy in fuel

    GREE

    G

    GREE

    C

    E

    GREE

    B

    E

    GREE

    D

    1 P E 4 4 1 5

    R R 15 4 113 Cb 7 71 71 68

    4Land Use Benefitb by

    b 6 6

    5

    Land Use Cost

    x

    b ( by S

    8/S & H 8)

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    (w 1++3)1

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    177

    (+3%)

    138

    (+51%)84

    * P b GREE A N

    Lby 7 UK UK Rwb F Ay 8

    Lan

    dUseEffects

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    Evaluating Biouels

    he consequences o using land to make uel

    7

    Unfortunately,

    growing plants fo

    biofuels requires

    land. If not used

    for biofuels, land

    would typically

    already be

    growing plants

    that are removing

    carbon from the

    atmosphere.

    EE

    y

    UK

    D

    V

    D*

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    UK DR

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    3 3 8 5

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    76 6 6

    18 ? ?

    115

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    he German Marshall Fund o the United States8

    Most hectares

    productive enough

    to produce

    average U.S. corn

    yields would also

    regenerate into

    trees if left alone.

    Using that spare

    hectare for corn

    ethanol would

    therefore increase

    carbon dioxide in

    the air compared

    to leaving it alone

    and allowing it

    to regenerate

    into trees.

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    4 y b Gbb (8), S(8b) F (8)

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    Evaluating Biouels

    he consequences o using land to make uel

    9

    Using land for

    biofuels comes

    at a high carbon

    opportunity cost

    for the intuitive

    reason that

    land with the

    rainfall and soils

    necessary to be

    highly productive

    for biofuels woul

    probably also

    produce a great

    deal of forest or

    food.

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    he German Marshall Fund o the United States10

    y b 17 w (B 7), w

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    C. What happens when biofuels divert

    existing cropland

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    Evaluating Biouels

    he consequences o using land to make uel

    11

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    The key to

    understanding th

    impact of biofuel

    on food prices is

    the rapid growth

    rate.

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    he German Marshall Fund o the United States12

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    Higher crop prices

    imply that some of

    the crops diverted

    to biofuels are

    not replaced,

    which dampens

    greenhouse gas

    emissions. To most

    people, however,

    these reductions

    in demand

    are probably

    a worse result

    than agricultural

    expansion

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    Evaluating Biouels

    he consequences o using land to make uel

    13

    These ongoing yi

    increases that w

    occur with or wit

    biofuels have gre

    significance for

    the worlds land

    use and carbon

    emissions, but th

    merits of biofuels

    have to be judge

    independently.

    Price-induced yield Increases

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    he German Marshall Fund o the United States14

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    by ,

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    13 w y b y,

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    D. Doubts about the land use challenge

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    13 by R H w b by E4 G w UK, j b y - b w w I j OECD 8 17 x

    Many controllable

    factors could in

    theory change

    the world land

    use situation for

    good or bad, but

    if those factors

    are independent

    of biofuels, they

    neither make

    biofuels a better

    strategy nor a

    worse one.

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    Evaluating Biouels

    he consequences o using land to make uel

    15

    Making Land Available for Biofuels : S x w

    y y,

    (K 8), w

    by b E

    w w b

    w w w b E

    b w b

    b

    My b y

    w b, b

    b, y b b y w

    Multiple Causes of Deforestation: S

    b y

    y b

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    O

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    8), w y w

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    1, y bw

    /14

    y

    A

    wy w b, b

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    b b- w

    w w

    b

    Unexpected Short-Term Economic Responses: M

    US y (

    USDA F A Py

    R I (FAPRI), w

    yy by ),

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    14 S b - S (8b) b y L A, yb, y Bz C

    The best potentia

    additional cropla

    for the world

    consists mostly o

    tropical forests, a

    there is good rea

    to believe carbon

    rich lands will

    provide much of

    worlds new crop

    and pasture to

    replace agricultu

    lands diverted to

    biofuels.

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    he German Marshall Fund o the United States16

    yb U S b x Mw, yb

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    b

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    y b y

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    Evaluating Biouels

    he consequences o using land to make uel

    17

    Much of the

    case for biofuels

    has relied on

    the potential

    availability of

    waste biomass.

    Waste and

    residual biomass

    also has the

    advantage that it

    is cheap or free.

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    Avoiding Competition for Land

    3

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    he German Marshall Fund o the United States18

    Former forests

    converted to

    grazing provide

    perhaps the most

    promising set of

    lands.

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    b by w y

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    Evaluating Biouels

    he consequences o using land to make uel

    19

    On balance

    there is probably

    potential to mak

    meaningful levels

    of biofuels from

    waste biomass

    and residuals, an

    probably some

    potential to use

    marginal lands

    that otherwise

    would store little

    carbon or produc

    little food.

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    b

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    he German Marshall Fund o the United States20

    Beyond

    environmental

    concerns, critics

    have also raised

    a number of

    questions about

    the costs of

    biofuel subsidies.

    It takes at least

    50 percent of the

    energy in biomass

    to turn the other

    half of that energy

    into a liquid fuel.

    Financial costs of biomass

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    Alternative uses of biomass

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    Financial and Efficiency Concerns

    4

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    Evaluating Biouels

    he consequences o using land to make uel

    21

    A IEA ,b y y b

    y Y,

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    (IEA 8b)

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    y w yy

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    he German Marshall Fund o the United States22

    D w 8, E U Db

    y

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    xy

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    x by

    The Future of Biofuel Policies

    5

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    Evaluating Biouels

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    Instead of

    subsidizing the

    biofuel per se,

    an alternative

    approach would

    subsidize the

    production of the

    feedstock from

    specific degrade

    lands.

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    Y

    I ,

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    he German Marshall Fund o the United States24

    I , y b b

    y y I

    , b

    y y by

    y w

    F b, b y

    w

    w

    b w w

    y I 5 1 b

    w y w , b y

    w w w

    b wy

    Public policy

    should now focus

    on showing we

    can produce one

    billion gallons the

    right way.

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    Evaluating Biouels

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    he German Marshall Fund o the United States26

    F A Oz UN (FAO) (8) Soaring Food Prices: Facts,

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    B IyJournal of Agriculture & Food

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    I Ey A (IEA)

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    I Ey A (IEA) (8)

    EnergyTechnology Perspectives P

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    Off i c e s

    Washington Berlin Bratislava Paris