Biofuels – a solution that will make the problem worse

Biofuels – a solution that will make the problem worse

22 November 2007

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Australia — Far from being a dream green techno-fix to global warming and rising oil prices, conventional agro-fuels will likely push global temperatures beyond the tipping point and spark food riots, famine and instability across many regions of the world.

“We believe we should be using more green fuel in Australia… Today I’m announcing a strong plan to increase Australia’s biofuel production and to encourage more Australians to choose biofuels at the fuel pump…The Coalition’s biofuel plan is… good news for the environment because it reduces GHG emissions … “
Mark Vaile, Deputy Prime Minister, Coalition Campaign Launch, Brisbane, November 2007.

Slowly but surely the government- and industry-led campaign to establish mandatory targets for biofuels – or more accurately agro-fuels – production and consumption in Australia is gathering pace. The NSW government has set a target of 2 per cent of all liquid transport fuels to be sourced from ethanol by the end of this year, as part of a more ambitious target of 10 per cent by 2011. Victoria has set a target of 5 per cent by 2010, and at the recent Ethanol 2007 Conference in Melbourne, State Treasurer John Brumby “called on the industry and the Federal Government to support a concerted campaign to educate the public and raise awareness of the benefits of biofuels”. The need to “educate” the public stems largely from the PR setback a few years ago produced by the story that ethanol could cause damage to engines.

Beyond these targets, there are visions of rich new fields of massive investment and opportunities for profit in agro-fuels.Professor John Mathews of Macquarie University’s Graduate School of Management has called for Australia to become a “biofuels superpower” within 10 years, on the basis of turning corn over to feedstock for agro-fuels, and massively expanding the growing of sugar cane and palm oil in the tropical north. He claims that with an investment of $7.5 billion over 10 years there could be built 60 advanced biorefineries, which would produce 6 billion litres of ethanol and 4.5 billion litres of biodiesel annually, supplying 20 per cent of domestic consumption and generating $10 billion per year, as well as creating 100,000 rural jobs. He expects the ALP to commit to a target of 10 per cent by 2012 during the current election campaign. The Federal Government’s current target of 350 million litres by 2010 represents only 1 per cent of domestic consumption.

The thrust to create a worldwide market for ethanol and biodiesel began after 2003 and has gained momentum in the last couple of years. Currently, liquid agro-fuels meet 1 per cent of global transport fuels requirements. The US and the EU have both set targets of 20 per cent of their domestic transport fuel coming from biofuels by 2017 (US, currently 2 per cent) and 2020 (EU, currently 4 per cent). For Europe to meet this target by itself it would need to plant 70 per cent of its existing farmland with agro-fuel crops; hence much of the production is slated for the developing world.

A key step in this process was the agreement reached between Brazil and the US in March 2007 to (a) establish ethanol as a world commodity, (b) share agro-fuel technology, and (c) encourage Central American and Caribbean countries to devote more of their territory to the growing of agro-fuels. Brazil is expected to construct a new ethanol refinery every month from now until 2013, when it will have more than 400 in the country. Its ambition is a 500 per cent expansion on its existing production, with the aim of meeting 10 per cent of global transport fuel demand by 2025.

With strong government incentives (for example tariffs, subsidies, tax offsets and targets), production of ethanol doubled between 2000 and 2005, and biodiesel production rose 60 per cent in the same period. China, Colombia, India, the Philippines and Thailand have all made major commitments to increase biofuel production. In 2005 theEU spent 3.7bn euros subsidising agro-fuels; yet the International Institute for Sustainable Development found that while it cost as much as 800 euros to avoid 1 tonne of CO2 emissions by making ethanol from sugar beet, that money could offset 160 tonnes of CO2 emissions via theChicago Climate Exchange.A recently-published OECD report found that in the absence of major subsidies ‘most biofuels cannot compete on price with’ fossil fuel products ‘in most regions of the world. The US spends more than $7 billion per year subsidising ethanol production.

The major push for agro-fuels should be understood in terms of energy security and as a new arena for global investment opportunities by agri-business & other multinationals (Archer Daniels, Midland, Cargill, DaimlerChrysler, Dupont, Shell) as well as billionaire investors (Richard Branson, Bill Gates, Goldman Sachs, Morgan Stanley). Venture capitalists such asIndian-American Vinod Khosla, who is one of the main advocates of globalising biofuel production, speak of the ‘enormous earnings potential’ of ethanol. Venture capital investment in agro-fuels has increased 800 per cent over the past three years; significant research grants are going to academic institutions, such asBP’s grant of $500mn to the University of California, which is shaping much of the nature of public debate. The political promotion of agro-fuels is also a way of governments and politiciansbeing seen to be “green” and “taking action” on climate change, without requiring any change at all in lifestyles or consumption patterns of Northern consumers.

Government subsidies, incentives and targets have created the global “biofuels boom”. One of its primary impacts has been asteep rise in the price of basic food staples, some of which have more than doubled in the past twelve months and are predicted to increase further in coming years. This will impact upon every consumer, but most especially the poorest in the Global South who are dependent on basic grains for their subsistence. There have already beenfood riots in Mexico this year because of a four-fold local rise in the price of corn. Tens of millions of subsistence farmers will be displaced by the push to sow vast acreages of crops for agro-fuels; in the process, world hunger, which already blights the lives of 842 million people, isexpected to affect 1.2 billion by 2025.

These developments prompted Jean Ziegler, the UN Special Rapporteur on the Right to Food, to describe the biofuel boom as, in effect, taking food from the mouths of the poor in order to put ethanol and biodiesel into the cars of consumers in the Global North. Mr Ziegler condemned this process in the strongest possible terms, as a“crime against humanity”, and called for a five-year moratorium on planting more biofuel crops until second-generation technologies had been further developed. This is also the position taken by campaigning groups such asBiofuel Watch, which is endorsed by hundreds of organizations and individuals worldwide.

And what of the “green” credentials of biofuels? One need look no further than Indonesia and Malaysia to see that this claim is a deceitful sham. Malaysia has already destroyed most of its virgin rainforests to become the world’s largest producer of palm oil, and Indonesia, not to be outdone, is expected to have obliterated its own rainforests within a decade or so. In our rush for rainforest-sourced biodiesel, we can say goodbye to the orangutan and hundreds if not thousands of other species. We can also say goodbye to the fight against global warming and our own collective futures.

Absolutely central to the promotion of agro-fuels is the idea that they are “carbon-neutral” and, more strongly, that they represent a major cut in CO2 emissions as compared to fossil fuel burning. But this claim ignores the “full lifecycle” of agro-fuels; in the case of palm oil grown in Indonesia and Malaysia, the carbon emitted through deforestation, forest fires, peat drainage, cultivation and soil carbon losses mean that every ton of palm oil “generates 33 tons of CO2 emissions – 10 times more than petroleum“. The growing of any agro-fuel that involves deforestation – and this will include the massive expansion of the Brazilian sugarcane fields because it will push displaced groups into the Amazon – will result in much greater CO2 emissions than fossil fuel burning. According to Doug Parr, Chief British scientist at Greenpeace, sourcing even 5 per cent of agro-fuels from existing ancient forests will destroy any carbon gain from all other agro-fuel sources combined. Even worse, the loss of rainforests deprives the earth of one of its key cooling mechanisms, the albedo effect produced by cloud-seeing bacteria that proliferate in these regions. Global temperatures will almost certainly reach the 2 degree tipping point and runaway, irreversible warming will become inevitable.

To complete this nightmare scenario we might add that the crops – corn especially – require vast amounts of fertilizer and pesticide, as well as heavy inputs of water. There are predictions of increasing water stress in the United States and elsewhere if tens of millions of hectares are devoted to growing agro-fuels. Production on this scale will lead to massive soil erosion and pollute groundwater sources and rivers. Australia is already facing a major water crisis with the collapse of the Murray-Darling basin. Do we really want to add salt on this open wound in order tofeed the profits of big business and venture capitalists?

The irony is that biomass-derived fuels have a very low power and energy density as compared to fossil fuels – for example 1.5 units of ethanol is needed to replace 1 unit of fossil fuels – and that these factors “provide permanent physical limits to the extent to which biofuels can replace fossil fuels“. Studies examining the potential energy yield from agro-fuels assume a land availability of 0.7 Giga hectares by 2050 (out of a global total land surface of 13.4 Gha; currently 0.01 Gha is devoted to biofuel production). TheOECD report says that this is “far too optimistic”; competition among arable land for food and bioenergy is unavoidable; and growing agro-fuel crops on “degraded” land is severely limited by water shortages. Including the much-heralded second generation technologies, the OECD estimates that theoretically 23 per cent of liquid fuel demand in transport could be met from these fuels by 2050; but that such potential was very unlikely to be realized.

A more realistic estimate is 13 per cent of liquid fuels by 2050, which would only represent at best a net reduction of 3 per cent of energy-related CO2 emissions; and even that is optimistic because it assumes continued government targets and falls in production prices of biofuels to below the levels of fossil fuels.

From every perspective other than the purely short-term commercial, conventional agro-fuels make little sense. The fundamental problem is that our political leaders do not want to talk about the truly sustainable alternative, which has to do with localizing our lives and production, and reducing our patterns of consumption. Second-generation fuels produced through biomass may well have a part to play in this possible future, but we need time to allow the science to develop further and for the public to consider the bigger picture.

The leaders of the major parties talk as though the cornucopian myth of endless economic growth were true, and as if there were no natural or resource limits to the extent to which we can degrade, pollute and deplete the environment and our natural resource base. Like true believers in a fundamentalist sect, they refuse to contemplate a deep questioning of the primacy universally attributed to “economic prosperity” and the corporate welfare state that goes with it. Contrary to this rose-tinted fantasy, all of us might soon be about to discover, to our great cost, that we can no longer have our cake and eat it.

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