From Energy Crisis to Food Crisis-Debate on the Development of Bioenergy
Issues facing current international energy development emerge mainly from concerns over shortage in fossil energy supply and greenhouse effect triggered by climate changes. The former has resulted in continuous hike of energy prices around the globe. At a time of costly energy supply and global climate change, most countries have begun to turn to energy policies that discourage fossil energy consumption and promote energy conservation on the demand side and are committed to increasing indigenous energy source and employing alternative energy on the supply side. Development of bioenergy, as a result, has become an important option.
In recent years, all the countries have spared no effort in their attempt to develop biofuel. An EU directive requires that biofuel should account for at least 6% of all fuels consumed by motor vehicles by 2010, and at least 10% by 2020. Consequently, European countries are importing large quantities of soybeans or palm oil from Brazil, Argentina, Indonesia and Malaysia as raw materials for biofuels. In its “Energy Independence and Security Act”sanctioned in December 2007, the US plans to increase biofuel production, requiring that annual production of ethanol reach 7.5 billion gallons in 2012, and 36 billion gallons in 2022. In conjunction with development of green transportation fuel, Taiwan has slated a series of bio-diesel and bio-ethanol development programs, including promoting use of biofuels, planting energy plants, formulating and implementing biofuel use regulation, providing assistance for technology training and transfer, and intensifying public awareness, in order to popularize application of biofuels.
As countries around the world are aggressively involved in biofuel development, however, most have failed to realize the impacts of extracting biofuel from grain crop on economy and the environment, impacts such as the fact that raising the production of biofuel will lead to food supply shortage, price hikes, expansion in the area of destructed tropical rainforest, and accompanying ecological calamities. From mid-2006 to 2007, global supply of grains including wheat, corn and soybean, whose supply was sufficient and whose prices were relatively stable in the past, began to wane and the prices continued to hit historical high. Early this year (2008) warning signs of food crisis further surfaced. Major international organizations, including FAO, UNFP, the World Bank, IMF, IFPRI and IEF, indicated in unison that recent global food crisis may have been the result of abnormal climate and frequent natural disasters, as well as increased demand of China and India and market speculation, but use of grain for extracting biofuels is in no wise less guilty. Biofuel development has been identified as one of the culprits, and there have continuous appeal to the relevant countries to freeze, postpone or reevaluate their biofuel development policies (especially those involving crop biofuels).
Bioenergy is one of the primary strategies employed by many countries to tackle the global warming, but it has also incurred adverse socio-economic and eco-environmental impacts. Perspectives of major international organizations, such as FAO and the World Bank, can be summarized as follows:
（I）Biofuel development is responsible for global food, political and economic crises
Energy and food competitions used to be examined individually in time past. Yet as the scope of biofuel development expands, the two have begun to affect each other. When the food value of the grains is lower than its fuel value, more of the crops will be used for the fuel market and the food market will be involved in the race for grains supply. Extracting biofuel out of grain, therefore, may tip the balance of food supply and drive the price up.
Corns have been used for producing ethanol-gasoline. Governmental incentives and subsidies have greatly increased the production of corns – yet not for food. The cost is dwindling production of other crops (such as soybean), which has impacted global food supply in a very significant way. Since corn is one of the primary sources of livestock feeds, the cost of the livestock industry rises, and the prices of meat and milk products follow suites. Reduced production of soybeans has also cut back global supply of edible oils. At present, many countries are using palm oil for food. Because of Europe’s demand for biofuel, the prices of edible oils have gone up to a new high.
Skyrocketing food prices have severely burdened poor countries and faced them with food crisis. Most of these countries are found in Africa, South Asia and Central America. Food shortage resulting from climbing grain prices has bred social unrest and given rise to various economic and political aftermaths. What’s more, protectionism of all sorts has begun to stem up in some of the countries. Under the pressure of imbalanced supply and demand, food-exporting countries are forced to consider limiting export, raising export tariff, increasing domestic food-security reserves and imposing quota control in order to ensure domestic supply. Energy crisis has caught the attention of the entire world, but food crisis is even more pressing and deserves more attention. The influence of biofuel on the oil market may have been extremely limited, yet its impact on food supply and prices is deep and far-reaching.
（II）Biofuel incentives and subsidies twist market mechanism
Biofuel owes its booming development mainly to production subsidies and protection policies, such as import bans or high tariff, of governments around the world. Meanwhile, biofuel also involves non-tariff barriers. Governmental incentives and subsidies have increased the production of crops used for biofuel at the cost of reduced production of other edible crops. The resulting effect has jacked up the overall food prices and may trigger inflation pressure or economic instability.
Biofuel not only afflicts people of struggling countries by driving up food prices, it has not helped farmers of the region because most of them are not able to change their production operation. Large-scale planting activities may even deprive small farmers of their farmlands and make it impossible for them to profit from biofuel development. Therefore, Asian Development Bank has urged developed countries to cancel their funding for biofuel crops.
（III）Biofuel development destroys ecology and environment and has ironically increased carbon dioxide emission
Intense global demand for palm oil, which is used in producing bio-diesel, has not only sent food prices skyrocketing, but also caused some of the countries to add considerable area for planting palm trees. The move has proved detrimental to the environment and ecology. International studies show that in Indonesia palm trees are eating into forest and highly sensitive peatland at an astonishing pace. Similar to wetland in appearance, the peatland contains piles of half-decayed plants, which can be as deep as seven meters into the ground. Once cultivated and drained, it will release large amount of carbon. Furthermore, reduction in grain cropping farmland and the resulting price hikes have prompted Brazilian farmers to cultivate more land of the Amazon forest, which in turn has accelerated carbon emission. So it may be more detrimental than beneficial to the ecology and environment.
At present the international community has not reach any consensus on whether biofuel development can in fact reduce emission of greenhouse gases. Yet as concern over the negative impact of biofuel on food supply and socio-economic stability intensifies, more are proposing reevaluation of biofuel development programs. EU, for instance, is reviewing its development goal established for 2020. As the threat of global food crisis is expected to linger on, Taiwan in the face of the fact that it is highly dependent on import for food supply, and that Taiwan’s food self-sufficiency rate has continued to drop in the past 10 years with the self-sufficiency rate of grain, the primary component, declining from 54% to 44.5% (while the self-sufficiency rate of wheat, soybean and corn is less than 10%), Taiwan ought to reexamine its policy that calls for planting biofuel crops on fallow land. Fallowing should be employed mainly to resolve food shortage in international food crisis.
In the face high energy cost and climate change, it is necessary to seek alternative energy, and biofuel remains one of the options. Yet limited by Taiwan’s weather conditions, high temperature and frequent rains, numerous pests, as well as high production cost and lack of economic scale, have rendered past effort in encouraging use of fallow land for biofuel plants (soybean, sweat potato, rape, sunflower) ineffective. The government’s agricultural policy is due for a change. It is true that we can begin to import bio-diesel or ethanol from other countries in the future. But current international trend may change directions, and the government will need to adjust its goal in developing bioenergy.
Second, in formulating the biofuel development policy we need to be extremely careful. We need to further explore and evaluate distinction between biofuel crops and food crops, and to select crop types of which the energy output and input ratio is greater than 1. We cannot afford to optimistically entertain the idea that planting biofuel crops on fallow land alone will allow us to develop a biofuel industry in Taiwan. Therefore, as far as biofuel source materials are concerned, our attempt to produce bio-diesel we should begin from the aspect of environmental protection and intensify recycling of wasted edible oils. For mid-to-long-term development (the next 10~15 years), we can explore algae development. In the area of bio-ethanol development, we need to fortify R&D of technology for converting cellulose to ethanol. For the endeavor we can use genetically modified crops, high-fiber plants (Miscanthus gigantus and jatropha) or agricultural wastes as the material.
In creating our policy to promote application of bioenergy, we should see incentives and subsidies for bioenergy production as short-term strategies that should be terminated in due season. Otherwise, bioenergy production and trade will be distorted and the calamities mentioned above may repeat themselves. A more plausible approach, therefore, may be levying carbon tax or energy tax against fossil energy to reflect its adverse impact and raising fossil energy prices to limit the usage. Thereby, we can not only encourage energy conservation and enhance energy use efficiency, but also boost market competitiveness of the kind of biofuels with both economic efficiency and environmental benefit.
Tags: Energy, farmer, food, Fuel