Development Policy Stance on Agrofuels. Discussion Paper

Transcription

1 D i s c o u r s e Deveopment Poicy Stance on Agrofues Discussion Paper

2 Deveopment poicy stance on agrofues content Executive Summary 3 1. the agroenergy market 4 2. risks and potentia for deveoping countries 5 3. Deveopment approach and recommended action 7 Annex Facts and Figures on the Main Aspects of Agrofues production and predicted expansion of production agrofue subsidies in the industriaised countries and avaiabe and and required for agrofues and agroenergy Word trade in agrofues competition with food production socia impications and dispacement of sma farmers impact on greenhouse gas emissions and other ecoogica impications 14

3 Deveopment poicy stance on agrofues executive summary over the past few years, agrofues have increasingy been used in the transport sector as an aternative to fossi fues, in the hope that this wi hep achieve cimate protection goas. in many industriaised countries and more advanced deveoping countries, governments have introduced poicies to promote agrofues. Germany s governing coaition parties agreed in November 2005 to increase the share of agrofues in tota fue consumption to 5.75 percent by the year 2010 and repace the exemption of agrofues from the minera oi tax with the compusory addition ( bending ) of agrofues to minera oi. This agreement was put into effect by the Biofues Quota Act, which came into force on 1 January 2007 and provides for the bending target to be increased to 8 percent by in March 2007, the european union set even higher bending goas. The German government took on board these goas at its cabinet meeting in Meseberg and they are currenty being transated into aw through nationa and european egisative procedures. a resut of oca peope and smahoders famiies being forced from good production ocations, poor conditions for workers on pantations and the destruction of the environment and biodiversity. so far, there is no internationa reguatory framework on agrofues to mitigate these socia and ecoogica risks. The greenhouse gas baance of agrofues varies widey depending on the feedstock used. That is particuary true when both the entire ife cyce, from production to processing, and aso changes in and use are taken into account. For deveoping countries, it woud appear that estabishing appropriate decentraised suppy and energy systems for the oca popuation is more beneficia to deveopment than exporting agrofues. even more than these poitica decisions, it has been the rise in oi prices that has boosted demand for aternative fues from biomass. As a resut, the agricutura sector in deveoping countries is increasingy concentrating on fue production. recent in-depth anayses and studies into the situation have prompted a re-examination of the opportunities and risks presented by agrofues. The growing demand for agroenergy is in competition with word food security and is resuting in competition over imited natura resources. Deveoping countries, from which considerabe amounts of fue wi need to be sourced if these bending targets are to be met, wi aso face considerabe socia and ecoogica risks, for exampe as in view of the egisative steps the european union is taking, now is a good time to review the situation from both an environmenta and aso a deveopment point of view. important aspects were addressed at the hearing in the German pariament on 20 February 2008 on Biomass opportunities and risks for goba cimate protection, biodiversity, energy security, food security and poverty reduction, jointy staged by the committee for economic cooperation, the committee for Food, Agricuture and consumer Protection and the committee for the environment, and by the debate on the foor of the House on 21 February 2008 on the amendment of Germany s Federa immission contro Act. in order to ensure a coherent approach that encompasses goba food security, environmenta

4 Deveopment poicy stance on agrofues protection, cimate protection and observation of minimum socia standards in equa measure, it is now vita to formuate the right poicies. These poicies shoud refect the foowing recommendations: The aim of German and european agrofue egisation shoud be to minimise risks, in particuar by defining criteria for ecoogica and socia sustainabiity and thus ensuring acceptabe bending quotas. since no internationa reguatory framework currenty exists that coud be taken as the basis for certifying agroenergy and ensuring that it is ecoogicay, economicay and sociay sustainabe, the first step now shoud be to test and deveop certification systems and to strive for internationa agreements. deveoping countries are now seeking to reguate the market for agrofues by introducing subsidies, tax rebates and bending quotas. In Europe, incentives are being offered principay in the form of binding bending quotas accompanied by tax reief. eu Directive 2003/30/ec sets a target whereby agrofues are to make up at east 5.75 percent of a fue used for transport purposes in the member states by The european Pariament and counci are currenty debating the draft of a Directive on renewabe energies that provides for an increase in this share to 10 percent by in anticipation of a rise in demand, investment in agrofue production has boomed. There are a number of reasons why searching questions need to be asked about the impact of this growth market: research and deveopment shoud be promoted, particuary with regard to improved and use systems and appropriate sources of agroenergy in rura areas in deveoping countries. Partner countries shoud be advised on the impementation of nationa food security strategies and biomass strategies that are suited to the country s specific potentia and form part of a broader rura deveopment strategy. 1. The agroenergy market The current debate on cimate change and the rise in oi prices have greaty increased interest in ways of enhancing energy efficiency and repacing fossi fues with renewabe energies. Many industriaised countries and more advanced Cimate impact recent anayses have shown that the roe payed by agrofues in reducing greenhouse gas emissions varies widey depending on the type of crop, cutivation method and technoogy used. so far, there is no internationay recognised method of drawing up and verifying a greenhouse gas baance. A number of methods exist, each producing widey divergent findings. since tropica pants use the sun s energy more efficienty, the biomass produced in deveoping countries has a much more positive greenhouse gas baance than that produced in europe, for exampe, provided it is not associated with the direct or indirect destruction of forests or moorand. on the other hand, finite natura resources (and, water), over which there is increasing competition, must be used in the production of agrofues. A more effective this paper examines the use of biomass for agrofue. it is generay acknowedged that, by comparison, the use of biomass for eectricity or heating is a more energy-efficient option. the 0 percent target was set based on the assumption that second generation agrofues woud be avaiabe.

5 Deveopment poicy stance on agrofues approach to preventing cimate change woud therefore be to reduce tota energy consumption and increase energy efficiency whist, above a, promoting second generation agrofues in industriaised countries, as we as soar energy, wind power and hydropower. the impact is generay positive when the aim is to estabish decentraised energy suppy sourced from sma farms, the risks of export-oriented mass production in response to booming demand from industriaised countries are considerabe. From a deveopment poicy point of view, the foowing risks shoud be highighted: Impact on deveoping countries The bending quotas set by the industriaised countries are highy reevant to deveopment poicy because they can, in a ikeihood, ony be met by means of massive imports of agrofue/biomass from deveoping countries. That is party because europe does not have enough farmand to produce the amount of biomass required (using current technoogy, over 70 percent of avaiabe farmand woud have to be used) and party because, potentiay, deveoping countries can be more productive and have a better greenhouse gas baance when it comes to the production of biomass. This atter aspect is significant as the German government s biomass sustainabiity ordinance demands potentia greenhouse gas reductions of at east 30 percent (and, as of 1 January 2011, at east 40 percent) if the biomass concerned is to be eigibe for incusion in bending quotas and tax rebates granted. 2. Risks and potentia for deveoping countries Whether promoting agroenergy presents more opportunities or risks to the deveoping countries depends to a arge extent on the reguatory framework but aso in particuar on how intensive these efforts are and what form they take. Whist Increasing competition over farmand and water current efforts to promote agroenergy threaten to uneash tougher competition over farmand and water across the word. The ikey negative impact of cimate change (decreasing agricutura yieds and reduced water avaiabiity) wi heighten this competition in a countries of the south. High popuation growth and the sharp rise in goba demand for foodstuffs wi aggravate matters. Dispacement of food production and rise in food prices spread of hunger one particuar risk of increased competition over farmand and water is the dispacement of food production. experience has shown that it is not ony unused, inferior and that is being used for agroenergy production but often the best and because of the higher yieds. The resut woud be a drop in word food suppy and therefore a rise in food prices. This food scarcity can make it even harder for the poor to obtain adequate suppies of food. According to the ifpri, for every percentage increase in food prices, an additiona 16 miion peope are threatened with hunger. The rura and urban poor are worst hit. Poor deveoping countries that are net food importers and are unabe to rapidy mobiise productive the technoogies required for what are referred to as second generation agrofues are sti at the deveopment stage and it is ikey to be severa years before they reach a stage where they can be used on a arge scae. second generation agrofues are synthetic fues made out of organic matter (e.g. wood, organic waste). internationa food poicy research institute, Washington

6 Deveopment poicy stance on agrofues capacity reserves wi be particuary hard hit by rising prices for agricutura produce. Dispacement of smahoders and other groups The search for new ocations on which to site arge-scae pantations can resut in smahoders, pastoraists and indigenous peopes being forced off their and. it is not uncommon for investors to tacity accept andgrabbing and the dispacement of ocas, often supported or toerated by top poitica officias. This phenomenon is currenty particuary apparent in African countries. pesticides and minera fertiiser required for the industria production of biomass aso have a negative impact on the cimate, the environment, soi fertiity and the heath of workers and ocas. Agroenergy production ony offers benefits for deveoping countries if effective mechanisms are deveoped and impemented for averting these risks. The internationa community urgenty needs to deveop mechanisms of this kind. Given the way the market is aready deveoping, however, it is questionabe whether these mechanisms wi be abe to take immediate effect. rising and and easehod prices as a resut of the increased demand for and are aso threatening to bock smahoders access to and. even if oi prices continue to rise, agrofues wi ony be competitive at internationa eve if they are industriay produced using every possibe opportunity for rationaisation and thus cost-effectivey (thanks to economies of scae). Agroenergy produced for the word market by sma farmers therefore has itte chance of being competitive. Risks for the environment and biodiversity The environment and biodiversity suffer when tropica forests, nature reserves and other areas of great natura or agricutura biodiversity are destroyed and used for food or agroenergy production. When and is converted, the harmfu greenhouse gases stored in the biomass are reeased, which has a asting negative impact on the greenhouse gas baance and the cimate. When smahoders are forced off their and to make way for agroenergy production, they are then ikey to seek to deveop new farmand by means of sash-and-burn techniques, compounding the negative impact on the cimate. The vast amounts of chemica Deveoping countries can tap into the potentia offered by agroenergy production in the foowing ways: Biomass production for oca decentraised energy suppy: m m m m can reduce poverty, increase incomes and boost the oca economy; if the capita generated by the rise in incomes is then invested in oca food production, productivity is ikey to rise and food prices drop in the medium term, can offer an aternative to the importation of fossi fues, which has a positive impact on the baance of foreign exchange payments and on rura energy suppy; the oca suppy of househod energy benefits women in particuar, has particuar advantages for andocked countries, who are faced with high transport costs for fue imports and for whom regionay produced agroenergy therefore offers comparative advantages, has the advantage, when grown as part of mixed cutivation (cutivation

7 Deveopment poicy stance on agrofues m of energy pants and food crops), of causing ess soi degradation than monocutivation and aso offers producers greater food security, shoud there be unfavourabe deveopments on the agroenergy market. can, when produced for export, boost sustainabe deveopment by increasing foreign exchange receipts if smahoders are abe to participate fuy and as ong as it does not compromise the avaiabiity of foodstuffs. To what extent this can be achieved depends on the context within each country and on internationa reguations. in genera, priority must be given to measures to reaise the human right to food, particuary where undernutrition and manutrition are prevaent. it must be ensured that the appropriate government reguations are in pace, in ine with binding internationa sustainabiity standards, and that they are impemented effectivey. Deveoping countries need the appropriate advice and support if they are to use this potentia. Deveopment cooperation can pay an important roe. 3. Deveopment approach and recommended action There is tension between the increased demand for agroenergy and efforts to ensure goba food security and protect biodiversity, the environment and the cimate. Forward-ooking poicies must be adopted at an eary stage in order to resove this tension as far as possibe. The foowing actions are to be recommended. a) Giving priority to food Non-governmenta organisations and experts, incuding the united Nations specia rapporteur on the right to Food and the German counci of environmenta Advisers, have demanded that, when there is competition between the production of food and the production of fue, priority be given to food. Poicymakers shoud respond constructivey to this demand. efforts to meet statutory bending quotas in Germany or the european union shoud not resut in pressure on production sites in deveoping countries. in view of both this and recent findings on the various impacts and precise baance of agrofues, any further increase in current bending targets shoud be carefuy considered. The foowing approach is recommended: Focusing German and European egisation on minimising the risks care must be taken in particuar to ensure that this egisation incorporates both ecoogica and socia sustainabiity criteria. This woud mean, for exampe, that biomass is ony eigibe for incusion in the bending quota if proof can be provided that its production in the country concerned wi not have any of the negative impacts outined above (particuary the dispacement of food production and sma farmers or nonobservance of ilo core abour standards). since the German sustainabiity ordinance is ikey to be repaced by eu-wide reguation, consutations on a draft EU directive offer an important opportunity for Germany to ensure that socia criteria are refected. The current revision of the eu Fues Directive (Directives 98/70/ec and 1999/32/32) aso offers a good opportunity for incorporating such criteria. Strategic aiances shoud be formed with other countries advo io = internationa abour organization

8 Deveopment poicy stance on agrofues cating socia sustainabiity criteria (e.g. the Netherands and the UK). environmenta protection: preventing chemicas entering air, water, soi, Another important chaenge is to introduce into the internationa debate new arguments on the WTo compatibiity of socia standards. b) Vountary commitments and certification systems since it has not so far been possibe to incorporate binding socia standards into existing reguations, the focus for now shoud be on supporting vountary sustainabiity initiatives in the foowing ways: Testing and deveopment of certification systems and sustainabiity criteria no negative effect on food suppy in region concerned as a resut of the production of biomass for energy generation; priority must be given to measures to reaise the human right to food, growth and prosperity: the production of agrofues must have a positive impact on the economy, empoyment and income distribution, proven observation of economic and socia rights; this incudes ilo standards, and use rights and and tite for sma farmers. A arge number of internationa initiatives have aready been aunched to deveop standards and certification systems. so far, however, no uniform internationa standards have emerged. The reevant internationa payers shoud work together more cosey on further eaborating these standards and achieving uniformity. The Cramer Commission s assessment framework is one important source that can be drawn on. it defines the foowing socia and ecoogica criteria: significant reduction in greenhouse gases across the entire chain from production to appication; proof must be provided that there has been no direct or indirect interference in existing carbon sinks (forests and sois), conservation and, if possibe, improvement of natura and agricutura biodiversity; no deterioration of nature reserves, one particuary important aspect when deveoping certification systems is that the process be participatory and non-discriminatory and that sma farmers be incuded. Striving for internationa agreements in order to ensure that agroenergy is produced sustainaby, agreements shoud be concuded between producer countries and importing countries. These shoud refect their shared responsibiity for creating a framework for reguation and monitoring. The countries concerned shoud aso commit to measures to counteract any negative impacts that shoud emerge. in particuar, the agreements shoud make reference to the reevant commitments under internationa aw (such as, for exampe, the duty to observe, safeguard and provide the right to food, which aso impies an internationa responsibiity). shoud it become necessary to take these corrective steps, Wto = Word trade organization the government of the netherands requested a commission headed by professor cramer to assembe a the various different viewpoints on the sustainabe production of biomass and to deveop a framework of concrete criteria and indicators for assessing the sustainabiity of biomass production. professor cramer is now continuing this work as minister of the environment of the netherands.

9 Deveopment poicy stance on agrofues consideration shoud aso be given to revising existing bending targets. in this context, WTo rues (Agreement on Technica Barriers to Trade) on standard setting shoud provide the frame of reference. c) Research and deveopment support shoud be provided for research and deveopment into the foowing topics in particuar: appropriate agroenergy sources for rura areas in deveoping countries, incuding increased research into the use of biogas, improved and use systems that aso incude energy crops, d) Advising countries as part of deveopment cooperation specia advice shoud be given in particuar to Least Deveoped countries that are net food importers on how they can guarantee nationwide food security over the short and ong term in the face of rising food prices. The 29 members of the Goba Donor Patform for rura Deveopment shoud deveop a common approach to advising partner countries on drawing up biomass strategies. This shoud incude a carefu anaysis of the risks mentioned in section 2 and the recommendations formuated on that basis. deveopment of indicators on a reevant Partner countries shoud be advised on sustainabiity criteria (in particuar food the deveopment and impementation of situation/right to food, biodiversity, pres- sustainabe biomass production strategies ervation of sma farming) as a basis for that incude the aspects of food security the appication of certification systems, and socia and environmenta standards ordinances etc. whist ruing out any possibiity of and use changes with harmfu consequences for the cimate.

10 10 Deveopment poicy stance on agrofues Annex Facts and Figures on the Main Aspects of Agrofues The foowing facts and figures aim to provide an initia, but by no means exhaustive, overview, which aso offers references for further reading. 1. Production and predicted expansion of production in 2006, agrofues accounted for a mere 1.12 per cent of goba fue consumption. of this, 4/5 was ethano and 1/5 biodiese. (Nova institut 2007, unpubished) in 2004, Brazi produced some 15 biion itres of fue ethano, contributing sighty ess than haf the word s tota. (ren21 renewabe energy Poicy Network, 2005, renewabes 2005 Goba status report, p. 10) The United States is the word s secondargest consumer and producer of fue ethano. The growth of the us market is a reativey recent trend. Production capacity increased from 4 biion itres per year in 1996 to 14 biion itres per year in Recent annua growth has been in the 15 to 20 per cent range. (ren21 renewabe energy Poicy Network, 2005, renewabes 2005 Goba status report, p. 11) ethano production in the USA and Brazi is expected to doube by in that same period, the EU pans to increase ethano production to 15 biion itres. This can ony be achieved with second generation biofues. (oecd-fao, 2007, Agricutura outook , pp ) The EU pans to increase the share of renewabe energies in primary energy consumption to 20 per cent by The German government has confirmed its commitment to meeting this target, stating that by 2020, 14 per cent of the energy used in heat production, 17 per cent used for motor fue and 27 per cent used in eectricity generation is to come from renewabe resources. (German counci of environmenta Advisers, 2007, cimate change mitigation by biomass, p. 1) The German Biofue Quota Act, which entered into force on 1 January 2007, requires biofue to make up 4.4 per cent of diese as of 2007 and 1.2 per cent of petro, with that proportion increasing each year by 0.8 per cent unti it reaches a minimum of 3.6 per cent in The tota quota is to be at east 6.75 per cent as of (Draft Act introducing a biofue quota by amending the Federa Poution contro Act and amending the energy and eectricity tax reguations) 2. Agrofue subsidies in the industriaised countries The production of ethano and biodiese is heaviy subsidised in the industriaised countries. In 2006, support for ethano

11 Deveopment poicy stance on agrofues 11 production in the EU totaed 1.29 biion euros and for biodiese 2.44 miion euros. (Goba subsidies initiative, 2007, Government support for ethano and Biodiese in the european union, p.1) in 2007, German power pant operators received government grants of some 200 miion euros to generate eectricity from pam oi. (rettet den regenwad e.v., 2007, orang-utans sterben für nachwachsende rohstoffe) 3. Land avaiabe and and required for agrofues and agroenergy With regard to deveoping the potentia offered by energy crops, the key question is how and requirements for food production wi deveop and what other demands wi be made of agricutura and in future. Decisive factors are popuation growth and the associated increase in food consumption, the improvement of crops and farming techniques, and the impact of cimate change. Depending on the assumptions on which various scenarios are based, it is estimated that a tota of between 0.73 and 3.3 biion hectares of and wi be avaiabe for farming energy crops in (Fischer and schrattenhoz, 2001, smeets et a., 2004; Hoogwijk, 2004 in Thrän et a, 2007, Kriterienmatrix zur stoffichen und energetischen Nutzung nachwachsender rohstoffe, pp ) in 2004, primary energy consumption amounted to 7,644 miion tonnes of oi equivaent, or around 321 exajoues. (internationa energy Agency, 2006, Key energy statistics, p. 28) By comparison, various scenarios for 2050 predict agroenergy potentia of between 87 and 279 exajoues for Latin America and between 49 and 247 exajoues for sub Saharan Africa. This potentia is predicated mainy on the assumption of a shift from extensive pastora production systems and increases in production and and use efficiency. The assumptions regarding technoogica progress in particuar are one major imponderabe in this scenario. (smeets et a. in Thrän et a., 2007, Kriterienmatrix zur stoffichen und energetischen Nutzung nachwachsender rohstoffe, p. 23) in order to achieve its ethano production targets by 2016, the USA woud require 43 per cent of the us corn and harvested for grain in 2004, meaning that either farmand woud have to be expanded drasticay or ivestock farming curtaied. The and-use change this woud require woud reease considerabe quantities of co 2. (searchinger et a., 2008, use of u.s. cropands for Biofues increases Greenhouse Gases through emissions from Land use change, p. 1239) in Indonesia, six miion hectares are currenty under pam oi cutivation. That is set to expand to 20 miion hectares by (oxfam, 2007, Bio-fueing Poverty, p. 2) The government of Mozambique is panning to turn over more than 5 miion hectares of and to the production of biomass for energy purposes by This is because, out of the 36 miion hectares of arabe and in Mozambique, ony 5 miion are being used for agricutura purposes. it is aso panned to cutivate crops ike Jatropha curcas on 41.2 miion exajoue = 0 to the power of 8 joues

12 1 Deveopment poicy stance on agrofues hectares of margina and that has not so far been cassified as agricutura and. This wi provide the rura popuation with a source of income and reduce oi imports, which currenty amount to over 700 miion itres a year. (H.e. savador Namburete, 2007, Mozambique experience on Bio-fues, internationa conference on Bio-fues, 5 6 Juy 2007, Brusses, Begium) Currenty, 1.6 miion hectares of crop area is being used in Germany to produce biomass for energy purposes. That area can be expanded to a maximum of 4 miion hectares by A maximum of 10 per cent of primary energy requirements coud be met using biomass, incuding biogenic waste. (German counci of environmenta Advisers, 2007, cimate change mitigation by biomass, p. 41) Biodiese produced from domesticay cutivated rapeseed wi be abe to meet ony 3.6 per cent of Germany s tota fue needs. (Federa Ministry of Finance, 2007, Biokraftstoffbericht, p. 5) if Germany were to produce enough biomass for a fue to contain at east 6.75 per cent agrofue by 2010, it woud use up the entire potentia avaiabe and. (German counci of environmenta Advisers, 2007, cimate change mitigation by biomass, p. 102) 4. Word trade in agrofues Between 2002 and 2007, there was rapid growth in word trade in bioethano. The voume traded rose from 3.2 biion itres in 2002 to 7.81 biion itres in This rise can be mainy attributed to the noticeabe increase in trade reported in Brazi when 2006 exports reached 3.5 biion itres, a threefod increase over 2002 figures. record acoho prices resuted as china shipped more than 1 biion itres of ethano in (GBeP-Goba Bioenergy Partnership, 2007, A review of the current state of bioenergy deveopment in G8 + 5 countries, p. 15) Production of ethano has increased consideraby in the USA as a resut of its nationa energy security target. Mode cacuations predict that this wi cause exports of corn to drop by 62 per cent, of soybeans by 28 per cent and of pork by 18 per cent. (searchinger et a., 2008, use of u.s. cropands for Biofues increases Greenhouse Gases through emissions from Land use change, p. 2) Maaysia and Indonesia account for 80 per cent of goba pam oi production. They hope to have achieved a 20 per cent share of the European agrofue market by (oxfam, 2007, Bio-fueing Poverty, p. 2) 5. Competition with food production in the 2006/2007 crop year, some 3.5 per cent of the goba wheat and corn harvest and 20 per cent of the sugar cane harvest was converted into ethano. The proportion of the goba wheat and corn harvest used for ethano production is set to rise to 5.1 per cent in the coming year. (Nova institute, 2007, unpubished) The OECD forecasts that, in order for the USA to meet its ethano production targets, maize use wi increase from some 57 miion tonnes in 2007 to over 110 miion tonnes in That is equivaent to about 60 per cent of the tota annua harvest in the usa.

13 Deveopment poicy stance on agrofues 1 (oecd-fao, 2007, Agricutura outook , p. 18) initia forecasts indicate that the price of food and feed wi rise consideraby. The internationa Food Poicy research institute (IFPRI) predicts, under one possibe scenario, price rises of 20 per cent for maize, 11 per cent for wheat and 33 per cent for cassava by Aternative scenarios predict more modest price rises. (ifpri, 2007, Bioenergy and Agricuture: Promises and chaenges, p. 8) The statistics for Germany revea price rises in 2007 of 4.6 per cent for fresh produce, 11.4 per cent for poutry and 10.5 per cent for dairy products. in that same period, the prices for pork and beef remained stabe. (centra Market and Price reporting Bureau for Agricutura, Forestry and Food Products, 2008) The Federation of German Food and Drink industries predicts further price rises. The German food industry is concerned about the impact that the panned increase in the target for compusory addition of agrofues to minera oi wi have on food prices in the medium term. (Federation of German Food and Drink industries, Frankfurter Agemeine Zeitung, 16 February 2008, p. 11) in view of food shortages and rising cerea prices, China is pacing strict imits on the production of biofues from pant sources. No new projects for the production of bioethano from cereas wi be approved before The aim of this rue is to stabiise cerea prices and ensure adequate food suppies for the chinese peope. (Österreichischer Rundfunk, 2008) 6. Socia impications and dispacement of sma farmers if deveoping economies are given the chance to participate beneficiay in the growth of renewabe bioenergy production whist sti maintaining adequate eves of food security, this is ikey to contribute to the broader growth of their economies and the betterment of human we being. (ifpri, 2007, Bioenergy and Agricuture: Promises and chaenges, p. 4) Non governmenta organisations and human rights organisations have, however, aso documented human rights abuses in connection with agrofue production. in deveoping countries in the tropics, 100 hectares dedicated to famiy farming generates 35 jobs. Oi pam and sugarcane provide ten jobs per 100 hectares and eucayptus two. Soybean pantations provide just haf a job for the same area of and. (eric Hot-Giménez, 2007, The Biofue myth, Internationa Herad Tribune, 10 Juy 2007, p. 1) According to sawit Watch, the number of and conficts in Indonesia has risen sharpy as demand for pam oi has increased. over 400 viages have aready suffered as a resut. (rettet den regenwad e.v., 2007, orang-utans sterben für nachwachsende rohstoffe) indonesian network campaigning against industria oi-pam pantations; founded in 998 by indonesian ngos.

14 1 Deveopment poicy stance on agrofues in Coombia, 2,100 peope from 23 viages were forced out of their homes by Accu units in Large areas of the viage of Nueva esperanza were set aight and five peope kied by the paramiitaries. According to an investigation by Incoder, the coombian institute for rura Deveopment, pam oi companies took this opportunity to take iega possession of 21,142 hectares of community and in the Chocó region. (koko e.v., 2007, Die Hoffnung hinter der Angst Friedensgemeinden in Koumbien, p.4) 7. Impact on greenhouse gas emissions and other ecoogica impications Due to the variety of factors infuencing the extent to which agrofues reduce greenhouse gas emissions and the way emissions reductions are cacuated (and-use change, crop cutivated, cutivation intensity, emissions from fertiisers and pesticides; energy requirements and origin of fertiiser production, processing methods, transport, to name but a few), the resuts obtained vary widey. cacuations tend to produce negative resuts above a when they factor in greenhouse gas emissions resuting from and-use change. 57 per cent of greenhouse gas emissions are caused by the burning of fossi fues. 18 per cent of greenhouse gas emissions are caused by and use changes (particuary the destruction of tropica rainforests and the draining of peatand and wetands). A further 14 per cent are accounted for by methane emissions and 8 per cent by nitrous oxide (N2o) (both aso argey in connection with agricuture). (internationa Pane on cimate change, 2007, cimate change 2007: synthesis report, p. 37) Mode cacuations produced in the USA that factor and use change into the greenhouse gas baance show that a hectare of corn for ethano reduces greenhouse gases by 1.8 tonnes per hectare per year but that each hectare of forest converted has up-front emissions of 604 to 1,146 tonnes and each hectare of grassand or savannah poughed up from 75 to 305 tonnes. That means that, whist using ethano from maize can potentiay reduce the usa s greenhouse gas emissions by 20 per cent if one eaves aside the effect of and use change, when the indirect conversion of grassand and forest is factored in, greenhouse gas emissions are actuay increased by 93 per cent. (searchinger et a., 2008, use of u.s. cropands for Biofues increases Greenhouse Gases through emissions from Land use change, p. 1239) Ethano from Braziian sugarcane coud pay back the up front carbon emissions in 4 years if sugarcane ony converts tropica grazing and or savannah. However, if dispaced ranchers convert rainforest to grazing and, the payback period coud rise to 45 years. (searchinger et a., 2008, use of u.s. cropands for Biofues increases Greenhouse Gases through emissions from Land use change, p. 1239) That puts into perspective the resuts obtained so far using cacuation methods that do not take into account and use changes and that concude, for exampe, that ethano production in Brazi has a very positive impact on the greenhouse gas baance. The various vaues that have been cacuated are 74 per cent (eu commission, 2008, Directive on the promotion of autodefensas campesinas de córdoba y urabá, paramiitary group

15 Deveopment poicy stance on agrofues 1 the use of energy from renewabe sources, p. 50) and 86 per cent (Macedo at a, 2004, Assessment of greenhouse gas emissions in the production and use of fue ethano in Brazi, p. 36). The deveopment of new and to meet demand for pam oi is contributing to the 1.5 per cent annua rate of deforestation of tropica rainforests in Maaysia and Indonesia, with a corresponding oss in carbon stores. (Fargione et a., 2008, Land cearing and the Biofue carbon Debt, p. 1) 27 per cent of concessions for new pam oi pantations in Indonesia are on peatand tropica rainforests, which first have to be drained. This wi resut in the destruction of 2.8 miion hectares of these peatand tropica rainforests, with resutant high emissions of greenhouse gases. (Fargione et a., 2008, Land cearing and the Biofue carbon Debt, p. 1) if and use changes are not taken into account when cacuating greenhouse gas savings, biodiese from pam oi can achieve savings of 70 per cent thanks to its high yied per hectare, provided it is produced in a sustainabe way and using optimised processes. The optimisation of existing pam oi pantations and pam oi extraction offers great potentia for reducing greenhouse gases. some four tonnes more greenhouse gases can be saved, compared with current practice. Few other energy systems today offer such great potentia savings. (Wupperta institut, 2007, sozia-ökoogische Bewertung der stationären energetischen Nutzung von importierten Biokraftstoffen am Beispie von Pamö, p. 71) Efficiency: compared with other energy uses, using biomass for fue is the east efficient option, both in terms of potentia greenhouse gas reduction and aso energy yied. using short-rotation pantations for heat has an energy yied of 150 gigajoues per hectare whist the production of motor fue from grain or rapeseed has an energy yied of ess than 50 gigajoues per hectare. The use of biogas from micro combined heat and power pants offers potentia greenhouse gas savings of over 15 tonnes of co 2 equivaent per hectare, whist bioethano from wheat or rape oi offers savings of ess than 5 tonnes of co 2 equivaent per hectare. (German counci of environmenta Advisers, 2007, cimate change mitigation by biomass, pp. 38 and 52)

16 Pubished by the Federa Ministry for Economic Cooperation and Deveopment Bonn Office Postfach Bonn Germany Phone + 49 (0) Fax + 49 (0) Berin Office stresemannstraße Berin Germany Phone + 49 (0) Fax + 49 (0) poststee@bmz.bund.de Editors in chief Karin Fojanty Fina editing steffen Beitz Officias responsibe Dr. christoph Kohmeyer As at March 2008 The BMZ Discourse series encompasses papers produced by the BMZ to discuss current deveopment poicy issues.