Policy options to address global land use change from biofuels
Highlights
► Biofuel land use change (LUC) risks include higher GHG emissions and food prices. ► Policy should distinguish among feedstocks based on LUC risk. ► We favor policy using LUC emissions estimates despite sizable scientific uncertainty. ► With or without LUC emissions point estimates, additional policies will be needed. ► Need adjunct policies to lower feedstock LUC risk, promote LUC-reducing investment.
Introduction
The production and use of biofuels have expanded dramatically in the last decade. World fuel ethanol production reached 1.5 million barrels a day in 2010, up from about 300,000 in 2000. Biodiesel production grew more than 20-fold, surpassing 335,000 barrels a day in 2010. US, Brazil, and the EU dominate, contributing 44, 27, and 17% of production, and 44, 23, and 23% of consumption, respectively (on an energy basis) (US Energy Information Administration, 2011). Today’s biofuels come overwhelmingly from feedstocks also used in food and feed markets—corn and sugarcane for ethanol (in the US and Brazil, respectively); soy, palm oil, and rapeseed for biodiesel (with major production in the Americas, Southeast Asia, and Europe, respectively). Alternative, non-food feedstocks from both crop and non-crop sources are under development, but not yet widely available. The pace of commercial development of these “next generation” feedstocks is uncertain.
A number of policies premised on reducing greenhouse gas (GHG) emissions, lowering reliance on oil imports, and stimulating rural development are being adopted to increase biofuel production and use. In the US, the Renewable Fuel Standard (US-RFS2) mandates the sale of increasing quantities of biofuels with lower lifecycle GHG emissions intensity than petroleum fuels, measured in carbon dioxide equivalents per unit energy of fuel (e.g., gCO2e/MJ), reaching 36 billion gallons in 2022 (EPA, 2010a). The European Union’s Renewable Energy Directive (EU-RED) requires 10% renewable energy in transport by 2020 (European Union, 2009a). EU-RED also sets a minimum GHG intensity percent threshold for reduction compared with petroleum fuels. The minimum threshold increases over time. Complementary to EU-RED, the Fuel Quality Directive (EU-FQD) requires a 6% reduction in transport fuel lifecycle GHG intensity between 2010 and 2020 (European Union, 2009b). California has a policy similar to the Fuel Quality Directive, the Low Carbon Fuel Standard (CA-LCFS), with a goal of 10% reduction in transport fuel GHG intensity by 2020 (CARB, 2009).
These policies lead to greater biofuel production, which also causes changes in land use. Where biofuel feedstocks are grown, the shift in land use is sometimes called “direct” land use change. When other productive activities are displaced by biofuel feedstocks, it can lead to production expanding onto new lands; this is sometimes called “indirect” land use change. Because the increased land competition can change agricultural prices, imports, and exports, this is sometimes referred to as “market-mediated” land use change. Because price changes affect all commodity production, the “indirect” label is often used to encompass all effects, including direct ones. We use the phrase “land use change” (LUC) to encompass both direct and indirect changes, and distinguish between “direct” and “market-mediated” LUC only when referring to policies that make the distinction.
Feedstocks requiring large areas of productive land, such as food crops, pose the greatest risk of LUC impacts. Crops’ LUC impact can be lowered, however, through higher yields or land-saving coproducts like animal feed, such as distillers grains derived from grain ethanol production and soybean meal derived from soybean diesel production. “Next generation” non-food feedstocks tend to carry lower LUC risk because they generally require less land, and compete less with existing land uses. Energy crops such as perennial grasses have the potential to impose less LUC risk because they have higher energy yields and can be grown on land unsuitable for growing food (Tilman et al., 2006, Tilman et al., 2009). Algae, and residues or waste from forests, agriculture, or other production, if collected without disrupting traditional production systems, do not rely on arable land so have very low or no LUC risk.
The concern over LUC from biofuels was initially motivated by analyses showing that diversion or disturbance of land could result in the release of large amounts of carbon stored in biomass and soils (Fargione et al., 2008, Gibbs et al., 2008, Searchinger et al., 2008). Converting land with large carbon stocks such as forests and peatlands causes the most emissions. Biofuel LUC and its associated GHG emissions cannot be directly or precisely measured; biofuels constitute only one of many drivers of global land use conversion that results from complicated market interactions (Renewable Fuels Agency, 2008, Edwards et al., 2010, Khanna et al., 2011). Efforts to estimate and account for LUC from biofuel production and its effect on GHG emissions are hotly debated (European Commission, 2010, Fritsche and Wiegmann, 2011).
Other biofuel LUC issues and concerns, in addition to increased GHG emissions, are higher or more volatile food prices, which hurt the poor (FAO, 2008, FAO et al., 2011); conversion of high biodiversity areas; overuse or degradation of water or land resources; damage to important ecosystem services (Koh and Wilcove, 2008, Donner and Kucharik, 2008, Welch et al., 2010); and disruption of land ownership or other social patterns (Toulmin, 2009). LUC impacts can also be positive, depending on location and management practices: biofuel LUC can improve resource productivity, sequester carbon, and provide additional income for rural populations (Tilman et al., 2009, Berndes et al., 2010). There remains great interest in how to manage biofuel production for more favorable outcomes (Dehue et al., 2009, Berndes et al., 2010, Croezen et al., 2010, Fritsche et al., 2010).
Approximately 15% of global GHG emissions come from LUC, primarily from agricultural expansion and deforestation (Berndes et al., 2010). Although biofuels use only about 1% of arable land (World Bank, 2010), this percentage is projected to expand. Estimates of area needed for biofuel feedstocks vary widely, depending on assumptions made about land productivity and technical change. In one study that assumes wastes and residues can generate half of advanced biofuels, feedstock covers 7% of agricultural land by 2050 (IEA, 2011). Studies assuming reliance on dedicated energy crops estimate much higher areas: feedstock comprising 15% or more of global (not just arable) land (Melillo et al., 2009; Wise et al., 2009).
Policymakers face trade-offs in deciding how to address biofuel LUC. Incorrectly ignoring high LUC can undermine GHG reductions, cause other adverse environmental impacts, or harm food access for the poor. On the flip side, incorrectly imputing high emissions to feedstocks can erode biofuels’ potential via more costly or slower biofuel expansion, affecting other policy objectives such as energy security and rural development (Gawel and Ludwig, 2011). Ideally, decision-makers will balance policy objectives to set acceptable levels of LUC risk, taking into account the best available information on outcomes of interest and uncertainties about feedstock-specific emissions. The goal is to maintain LUC within acceptable risk levels (Croezen et al., 2010, Plevin, 2010, Kocoloski et al., 2011, LowCVP, 2011). In this paper, we present a policy framework for addressing biofuel LUC in Section 2. Section 3 reviews the treatment of LUC in current biofuel policies. 4 Strategy I: Use of feedstocks that are less reliant on land, 5 Strategies II and III: Additional and complementary policy options to reduce biofuel LUC discuss policy options under three principal LUC strategies and we conclude in Section 6.
Section snippets
A policy framework for biofuel LUC
Strategies to address unwanted biofuel LUC effects fall into three categories (Fig. 1): (1) utilize feedstocks that require less land; (2) adopt measures that lower LUC risk from land-using feedstocks; and (3) invest in productivity gains, environmental protection, and carbon accounting methods that reduce the scope for biofuel and other LUC. In general, policy targets broaden as one moves down the list of strategies – from within to beyond the biofuel supply chain – and involve more
Current policy treatment of biofuel land use change
The principal US and EU biofuel policies – US-RFS2 and CA-LCFS, and the EU-RED and EU-FQD – include two major types of LUC strategies: (1) setting specific requirements in feedstock land use type and fuel volumes; and (2) adopting/considering feedstock-specific LUC emission estimates.
Strategy I: Use of feedstocks that are less reliant on land
Policies aiming to encourage a less land-reliant feedstock mix (Strategy I) can be improved through use of feedstock-specific LUC emission estimates to help distinguish among feedstocks based on their LUC risk. Policies can directly incorporate these estimates as ILUC factors (Strategy I, Approach 2), as done by the US and California. Alternatively, policies can use estimates to guide other types of feedstock incentives and disincentives, as suggested by Gawel and Ludwig (2011), such as
Strategies II and III: Additional and complementary policy options to reduce biofuel LUC
As currently implemented, the ILUC factor conveys a strong signal about acceptable risk with immediate and transparent ramifications for less land-reliant feedstock choices (Strategy I). It does not, however, incentivize actions by individual producers to lower LUC given their choice of feedstock (Strategy II). It also does not provide incentives for broad investment in land use efficiency and carbon accounting that would reduce the scope for biofuel and other LUC in general (Strategy III).
Discussion
In principle, the most efficient ways to reduce land use emissions are to put a price on carbon (Melillo et al., 2009), or to regulate land use emissions in all activities, not just biomass production for energy (Searchinger et al., 2009). If such policies were broadly applied, the rationale for addressing LUC within biofuel policy would vanish. Neither approach, however, is in place or likely to come into effect globally within the time horizon of current biofuel policies. In the meantime, LUC
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