Bioethanol
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
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
References: th Liu, Y. 2006. China to Boost Bioenergy through Financial Incentives. China Watch (June 13 2006). Worldwatch Institute, Washington, DC. 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).