Global Scenarios for Biofuels: Impacts and Implications Siwa Msangi, Timothy Sulser, Mark Rosegrant, Rowena ValmonteSantos and Claudia Ringler International Food Policy Research Institute (IFPRI) Abstract In recent years, bioenergy has drawn attention as a sustainable energy source that may help cope with rising energy prices, but also maybe provide income to poor farmers and rural communities around the globe. Rising fuel prices, growing energy demand, concerns over global warming from GHG emissions and increased openness to renewable energy resources, domestic energy security, and the push for expansion into new markets for crops in the face of world trade outlooks are all factors driving interest in expanding bioenergy use. Despite keen interest in this sector, there are currently few players in this field: In 2005, Brazil and the United States together accounted for 99 percent of global ethanol production, whereas Germany and France accounted for 69 percent of global biodiesel production. However, developing countries with tropical climates may have a comparative advantage in growing energyrich biomass; and second generation technologies could enable expansion of the range of feedstock used from the traditional sugarcane, maize, and rapeseed to grasses and trees that can thrive in less fertile and more droughtprone regions. Potentially adverse impacts from a rapid bioenergy expansion include upward pressure on international food prices, making staple crops less affordable for poor consumers; potentially significant adverse impacts on both land (soil quality and fertility) and water resources; and on biodiversity and ecosystems, in general. Given the numerous and high level of uncertainties regarding future biofuel supply, demand, and technologies, the paper examines three alternative scenarios: a conventional scenario, which focuses on rapid global growth in biofuel production under conventional conversion technologies; a second generation scenario, which incorporates a ‘softening’ of demand on food crops due to 2nd generation, lignocellulosic technologies coming online; and a ‘second generation plus scenario’, which adds crop productivity improvements to the second generation scenario, which essentially further reduce potentially adverse impacts from expansion of biofuels. Results from the analysis show a potential food and waterversusfuel tradeoff if innovations and technology investments in crop productivity are slow, and if reliance is placed solely on conventional feedstock conversion technologies to meet future blending requirements of fossil fuels with biofuels. This situation changes considerably with increased investments in biofuel conversion and crop productivity improvements. To mitigate potentially adverse impacts from aggressive increases in biofuel production therefore requires a renewed focus of crop breeding for productivity improvement in wheat, maize and even sugar crops. While some crops may be more favorable from the perspective of profitability, they may encounter binding environmental constraints, in particular water, for example, for sugarcane in India, and wheat or maize in Northern China. And even where water might be available, other natural resource constraints, such as land availability can constrain expansion, such as in Southern China. Impacts of global biofuel development and growth on rural poor can be both positive and negative. Biofuel crops do not necessarily crowd out food crops, at least not under the alternative scenarios examined here. Instead there is room for complementarities and synergy and rural agricultural development and socioeconomic growth can go handinhand with enhancement of ...
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Msangi et al.
Figure 1: Share of different energy forms in global total primary energy supply at 10,345 mtoe (million tons of oil equivalent), 2002.
Figure 3: Projected Transportation Demand for Gasoline (millions of tons oil equivalent – MTOE)
450 400 million tons oil equivalent 350 300 250 200 150 100 50 0 2005 Source: Author calculations. 2010 2015 2020 2025 2030 China India Brazil USA EU
9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Maize LAC SSA S Asia SE Asia Wheat E Asia World
Source: IMPACT simulations (October 2006). Figure 6: Changes in Global Commodity Prices from Baseline Across Scenarios in 2020 76 80
% difference from baseline 70 60 50 41 40 30 30 20 10 0 Conventional 2nd Generation Sugarcane 2nd Generation Plus Wheat 29 21 23 16 45 49 43 43 66
Maize Oilseeds Source: IMPACT simulations (October 2006).
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