Biofuels and Sustainable Development

Report of An Executive Session on the Grand Challenges of a Sustainability Transition

Liquid biofuels can provide a much needed substitute for fossil fuels used in the transport sector. They can contribute to climate and other environmental goals, energy security, economic development, and offer opportunities for private companies to profit. If not implemented with care, however, biofuel production can put upward pressure on food prices, increase greenhouse gas (GHG) emissions, exacerbate degradation of land, forests, water sources, and ecosystems, and jeopardize the livelihood security of individuals immediately dependent on the natural resource base. Guiding biofuel development to realize its multiple potential benefits while guarding against its multiple risks requires the application of a similarly diverse set of tailored policy interventions, together with integrated efforts to assure that those interventions work synergistically rather than at cross-purposes. Most session participants agreed that any single rule - such as production subsidies, a simple ban on biofuel production or the immediate revocation of existing mandates for biofuel use - is too blunt an instrument, and will almost certainly do more harm than good.

Biofuels have emerged as a centerpiece of the international public policy debate. All of the G8+5 countries, with the exception of Russia, have created transport biofuel targets. Some countries have mandated the use of these fuels. For example, in January of 2008 the European Union reaffirmed a goal that 10% of vehicle fuel be derived from renewable sources by 2020.  And the U.S. Energy Security and Independence Act requires that 36 billion gallons of renewable fuels be blended into gasoline by 2022. Recently, however, increased food prices triggered in part by converting food crops such as maize to fuel have raised public concerns about such goals. These concerns have been reinforced by several studies which indicate that biofuels may aggravate the net emissions of greenhouse gases rather than reduce them. While the potential benefits of biofuels have induced some governments to embrace their potential, many leaders are now concerned about the costs – particularly those that impact food prices and the environment.

Biomass can be used to provide energy in many forms including electricity, heat, solid, gaseous, and liquid fuels. These bioenergy options have been actively pursued in both the developed and developing world. Further, approximately two billion of the world’s poorest people use biomass directly for cooking and heating, often seriously endangering their health and their environment. This Session focused exclusively on one part of the bioenergy menu: liquid biofuels for transportation. The Session asked three principal questions. Why should countries care about biofuels? Why should they be concerned about the negative spillover effects of biofuel production? What can be done to mitigate these negative effects, while promoting the development of a sustainable biofuel industry?