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The food vs. fuel debate has heated up since the 2008 global food crisis when major crop prices dramatically increased. Heavily subsidized biofuel production was blamed for diverting food crops from food production and diverting resources from food and feed production, triggering a food crisis globally and leading to increases in the world food insecure population. Few studies have quantified the effects of biofuel policies on world food prices and world food insecurity. This study added the Brazil and China's biofuel sectors to an existing global trade CGE model, and applies the measurement of food insecurity as developed by FAO. Alternative scenarios were food insecurity. Results are examined with focus on (1) effects on domestic biofuel productions, (2) change in food commodity productions and trade, (3) change in land use and land rents, and (4) change in regional undernourished populations. Results indicated that biofuel expansion is not cost competitive to traditional fossil fuel. Without any policy incentives, huge expansion of biofuel production is not likely under current technology. The conventional biofuel mandates in U.S., Brazil and China lead to increases in world food insecurity, while the advanced biofuel mandate in U.S. has the opposite effect. Subsidies to biofuels production help to lessen the increase in world food insecurity that is caused by increases in conventional biofuel production. Additionally, the effects from U.S. biofuel policies are smaller but more widespread than the effects from Brazil or China's biofuel policies. Overall, the long term effects of biofuel production expansion on world food insecurity are much smaller than expected.
Examining the relationship between biofuels and food security, this book presents an economic analysis of the competition between biofuels and food. It covers the historical and current situation of biofuels and food security in Brazil, China, Japan, USA, EU, Thailand, India, Indonesia, Malaysia, Philippines and other countries. Furthermore it demonstrates that not only feedstock of agricultural product-based biofuels, but also cellulose-based biofuels can compete with food-related demand and agricultural resources. The issue of whether this competition is good or bad for food security is explored, and this topic is examined at global, national, sub-national and household levels. In order to deal with energy security, to reduce greenhouse gas emissions, and to strengthen agricultural/rural development, biofuel production and utilization is increasing all over the world. One of the most crucial problems is the competition for resources between biofuel and food. This biofuel and food security discussion is expected to continue into the future, and this book proposes the action that is needed to deal with this issue on various levels. Biofuel and Food Security provides a valuable resource to undergraduates and researchers of economics, agricultural economics and renewable science, and also policy makers involved in government or international organizations. It will additionally be of interest to those employed in renewable energy and agriculture in an industrial capacity.
We developed Dynamic Inter Regional Computable General Equilibrium (IR- CGE) for Energy and Agriculture Model that incorporates geographic features into CGE. Within the context of comparative advantage we demonstrate how the biofuel policy impact on trade and food security. We find that biofuel policy may benefit for exporters countries which mostly are developing countries and cost for importers countries. In term of geographical analysis, European Union may trading with neighbor country and independent for biofuel commodities from developing countries. Meanwhile, food security issues in developing countries may lead more fluctuated price in agriculture price than in developed countries; in supply side trade liberalization may increase in welfare export and output accordingly.
Environmental, Economic and Policy Aspects of Biofuels provides a timely summary of the current issues contributing to the policy debates on this emerging and important topic. The authors make several key conclusions: - Biofuels are diverse and evolving. The next generation of biofuels has the potential to provide improved net benefits but requires significant technological breakthroughs. - Greenhouse gas (GHG) benefits vary significantly across various types of biofuels and are dependent on market conditions and policy situation. - While biofuel improves the welfare of gasoline consumers and food producers, it has a significant negative affect on food consumers, especially the poor. - A diverse set of policies, which have been introduced or proposed, impact biofuels directly including subsidies, mandates, and regulation of carbon content of fuels. However, current policies do not provide incentives that align private and social welfare. - Much of the impact assessments of biofuels thus far are ex-ante estimates based on either optimization or equilibrium models. There is a lack of ex-post econometric analysis of the marginal impact of biofuels and biofuel policies on the economy. And the structural relationships between agriculture, the energy sector, and the environment in the context of biofuels have hardly been studied. The biofuel policy debate is likely to be an ongoing one in the near future and Environmental, Economic and Policy Aspects of Biofuels should be required reading for anyone interested in understanding this diverse and growing literature.
Interest in biofuels began with oil shocks in the 1970’s, but the more rapid development and consumption of biofuel industry in recent years has been primarily driven by mandates, subsidies, climate change concerns, emissions targets and energy security. From 2004 to 2006, fuel ethanol grew by 26% and biodiesel grew by 172%. As biofuel production continues to expand, investments in capacity expansion and research and development have been made. The 2008 food crisis emphasized the need to re-examine biofuel consequences. Biofuels remain an important renewable energy resource to substitute for fossil fuels, particularly in the transportation sector, yet biofuels’ success is still uncertain. The future of biofuels in the energy supply mix relies on mitigating potential and improving the environmental gains. This book brings together leading authorities on biofuel from the World Bank to examine all of the impacts of biofuel (economic, social, environmental) within a unified framework and in a global perspective, making it of interest to academics in agricultural and environmental economics as well as industry and policy-makers.
"A potent argument for bioenergy development lies in the ability of the sector to unlock agricultural potential by bringing in much needed investments to raise agricultural productivity to spur food security and poverty reduction. This document presents the BEFS Analytical Framework (AF) developed to test this argument. Agriculture lies at the heart of the BEFS AF and allows governments to consider viable pro-poor strategies for bioenergy development. The set of tools within the BEFS AF offers an integrated approach to decision-making that combines the technical viability with the country's prevailing social and economic development objectives. This document explains the rationale and structure of the BEFS AF, provides a general overview of the tools and their application, and illustrates how the analytical information generated assists policy makers in making informed decisions concerning the many varied consequences of bioenergy developments on food security, poverty reduction and agriculture development and economic growth."--Provided by publisher.
In recent years, food prices have been volatile worldwide. High and fluctuating food prices have led to riots in many low income countries, and have increased the world poverty population. Both developed and developing nations are rushing to buy farmland, even outside their own countries, for their future food security, which indicates that it has been more difficult to secure food supplies. This book addresses the issue of agricultural trade liberalisation by Japan, factors behind the world food price spikes in 2008 and their impacts on the least developed economies, using computable general equilibrium models. The book gives the reader insights into the probabilistic benefits and risks of agricultural free trade by Japan that past literature has not answered. Furthermore, the reader will be given a better understanding about the size of the impacts of various factors behind the 2008 food price hikes, such as biofuel, the rise in oil price, severe poor harvests in Australia, and their effects on impoverished countries. This book will be indispensable, not only for students, academics and policy makers who are involved in the fields of agriculture, development, and food security, but also for people learning CGE modelling, as it provides readers with plenty of information on the structure and applications of the models.
In October 2011, the UN Committee on World Food Security (CFS) recommended a ''review of biofuels policies -- where applicable and if necessary -- according to balanced science-based assessments of the opportunities and challenges that they may represent for food security so that biofuels can be produced where it is socially, economically and environmentally feasible to do so''. In line with this, the CFS requested the HLPE (High Level Panel of Experts) to ''conduct a science-based comparative literature analysis taking into consideration the work produced by the FAO and Global Bioenergy Partnership (GBEP) of the positive and negative effects of biofuels on food security''. Recommendations from the report include the following. Food security policies and biofuel policies cannot be separated because they mutually interact. Food security and the right to food should be priority concerns in the design of any biofuel policy. Governments should adopt the principle: biofuels shall not compromise food security and therefore should be managed so that food access or the resources necessary for the production of food, principally land, biodiversity, water and labour are not put at risk. The CFS should undertake action to ensure that this principle is operable in the very varied contexts in which all countries find themselves. Given the trend to the emergence of a global biofuels market, and a context moving from policy-driven to market-driven biofuels, there is an urgent need for close and pro-active coordination of food security, biofuel/bioenergy policies and energy policies, at national and international levels, as well as rapid response mechanisms in case of crisis. There is also an urgent need to create an enabling, responsible climate for food and non-food investments compatible with food security. The HLPE recommends that governments adopt a coordinated food security and energy security strategy, which would require articulation around the following five axes/dimensions: Adapt to the change to global, market-driven dynamics; Address the land, water and resource implications of biofuel policies; Foster the transition from biofuels to comprehensive food-energy policies; Promote research and development; and, Develop methods and guidelines for coordinated food, Biofuels, and bio-energy policies at national and international levels.
The global food crises of 2008 and 2010 and the increased price volatility revolve around biofuels policies and their interaction with each other, farm policies and between countries. While a certain degree of research has been conducted on biofuel efficacy and logistics, there is currently no book on the market devoted to the economics of biofuel policies. The Economics of Biofuel Policies focuses on the role of biofuel policies in creating turmoil in the world grains and oilseed markets since 2006. This new volume is the first to put together theory and empirical evidence of how biofuel policies created a link between crop (food grains and oilseeds) and biofuel (ethanol and biodiesel) prices. This combined with biofuel policies role in affecting the link between biofuels and energy (gasoline, diesel and crude oil) prices will form the basis to show how alternative US, EU, and Brazilian biofuel policies have immense impacts on the level and volatility of food grain and oilseed prices.
This paper assesses the implications of large-scale investments in biofuels for growth and income distribution. We find that biofuels investment enhances growth and poverty reduction despite some displacement of food crops by biofuels. Overall, the biofuel investment trajectory analyzed increases Mozambique's annual economic growth by 0.6 percentage points and reduces the incidence of poverty by about 6 percentage points over a 12-year phase-in period. Benefits depend on production technology. An outgrower approach to producing biofuels is more pro-poor, due to the greater use of unskilled labor and accrual of land rents to smallholders, compared with the more capital-intensive plantation approach. Moreover, the benefits of outgrower schemes are enhanced if they result in technology spillovers to other crops. These results should not be taken as a green light for unrestrained biofuels development. Rather, they indicate that a carefully designed and managed biofuels policy holds the potential for substantial gains.