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Potential Future Impacts of Increased Biofuels Use

Govinda Timilsina's picture

This entry is part of a series of posts written by members of the Environment and Energy team of the World Bank's Research Group on economic and policy issues involving energy and climate change mitigation.

Ongoing controversy has surrounded production of crop-based biofuels, ostensibly for the purposes of increase renewable energy use and reducing carbon dioxide (CO2) emissions that causes global warming.   To illustrate, a recent report on price volatility in food and agricultural markets prepared by numerous international organizations, including the World Bank, at the request of G20 Governments recommended elimination of current national policies that subsidize or mandate biofuels production or consumption. Some international non-governmental organizations, such as Action Aid strongly supported the recommendation, while some other organizations, such as Renewable Fuel Association opposed it. The June meeting of G20 agriculture ministers did not make any decision in favor or against biofuels, deciding instead to have further analysis.

Biofuels: Threat or opportunity for women?

Daniel Kammen's picture

In Africa, where two-thirds of farmers are women, the potential of biofuels as a low or lower-carbon alternative fuel, with applications at the household energy, community and village level, to a national resource or export commodity, has a critical gender dimension. The key question is: how will increased biofuel production affect women?

To look at the impacts on women, one logical approach is to use a computable general equilibrium model that tracks economic impacts of new crops and how patterns of trade and substitution will change. It’s important to account for the complexities involved, and rely not on a simple, traditional commodity model but one that tracks the impacts on women through changing prices and demands for crops to be sold on local and international markets. Who gains and who loses as prices change, and as the value of specific crops and of land changes?

In a detailed modeling effort based on the situation today in Mozambique, World Bank economist Rui Benfica and colleagues (Arndt, et al., 2011) found that even with significant land area available, the impacts of large increases in bio-fuels production — which are now under way — will do little to benefit women. This is largely because shifts to export-oriented and commercial agriculture, while they may raise export earnings, often exclude women. Women are often already far over-burdened by work and time commitments to subsistence farming, other income-generating activities and household work, including child care. The CGE model shows that financially profitable bio-fuel expansions may widen this gap, and reinforce this exclusion.

Inflation Invasion? Thailand takes on higher global food and fuel prices

Frederico Gil Sander's picture

Higher prices have been making headlines in Thailand. Although wages and farm incomes are up, so are the prices of eggs, milk and fried rice. I am definitely feeling the pinch: the price of my favorite beverage—coconut water—has surged following a beetle infestation.

As prices go up, so does the pressure on the government to reign in the spiraling cost of living. But as we discussed in the recently released Thailand Economic Monitor - April 2011, the current inflation challenge is especially tough to tackle.

Watch out for minimal food stocks! But don’t assume the worst has come…

Merrell Tuck-Primdahl's picture

Food price spikes happen when stocks are low and when unpredictable events occur. That was the main message of Professor Brian Wright at his Development Economics Lecture at the World Bank on March 11.

Wright, who is Professor & Chair Department of Agricultural & Resource Economics, has long followed the markets for storable commodities. He is also an expert in invention incentives, intellectual property rights, the economics of agricultural research and development, and the economics of conservation and innovation of genetic resources.

Today’s food and fuel concerns do not constitute the ‘perfect storm’, Wright said. However, he warned that if several important crop-producing countries have a bad season in the coming year, and if the demand for biofuels rises faster than the rate of production of major grains, we could be in real trouble.

What’s the best fix for this situation? Wright argues it’s keeping food supplies cheap and investing in the Consultative Group for International Agricultural Research (CGIAR), since it will be super-seeds, drought resilient crops, and innovations to boost yields that will turn things around. He also emphasized that, during a crisis, it’s essential to put minimum food needs above animal feed and fuel uses. 

Watch the video interview with Wright below. 

China’s food prices – why have they trended up and what lies ahead?

Louis Kuijs's picture
China’s food prices – why have they trended up and what lies ahead?

(Available in Chinese)

Food prices have received a lot of attention recently. Understandably, much of the attention is on recent developments and short term prospects. But in this blog post I try to look back at some longer term trends, in order to look further ahead.

Since the early 2000s, food related prices have trended up (Figure 1). The deflator of agricultural value added has risen 8% per year on average since 2000, after falling during the second half of the 1990s. Producer Price Index (PPI) food prices (factory gate) have risen much less because prices of other inputs into the food processing industry have gone up less and rapid productivity growth in food processing has dampened the transmission of higher raw food prices.

The next food crisis - is it coming?

Ivailo Izvorski's picture

Remember the food and fuel crisis that preceded the global economic and financial meltdown? Many in the advanced economies have long forgotten it; people in developing countries have very vivid memories. Are we about to relive the crisis? 

Convenient solutions to an inconvenient truth: How old-fashioned conservation helps deal with climate change

Tony Whitten's picture

So much is being written about climate change. The heat is on, so to speak, to find new solutions to increasingly dire predictions from ever more detailed data and refined models.

Indonesia: Bio-gas project keeps pig farm waste from going to waste

Nia Sarinastiti's picture

Pig farmers in Nias pull a 'waste disappearing act' by converting manure into useable energy.
At one of my trips to Nias, Indonesia, I discovered that a pig pen can actually be so clean without any spot of dirt or waste. It was something I have never imagined after seeing pig farms that have mud (of all kinds all) all over the place. You can imagine what it would look like, right?

The clean pig pen I saw was in the village of Tetehosi, Idanagawo sub-district owned by a farm group with the name Ternak Harapan Maju which means, “Farm Hopes to Progress.” The pen is managed by priest Sabar Markus Lase, not only because he knows about pig farming, but also because the pig pen is in the backyard of the church.

Picture the figures of the food crisis

Claudia Gabarain's picture

Using data from the Food and Agriculture Organization (FAO) and the OECD, BBC News online created some interesting graphics showing the impact of and factors in the current food crisis. They include a 30-year look at food commodity prices, US ethanol production, world population growth, changing eating habits, and demand for biofuels among others. Worth a look.

Rising food prices and East Asia: trends and options

Milan Brahmbhatt's picture

Soaring food prices have suddenly become a major concern for policy makers in East Asia.  The price of rice - which provides one third of the region's caloric intake - is a particular worry.  Rice prices have been moving higher since around 2004, although this was from very depressed levels in the early years of the decade.  Prices surpassed $300 a ton in early 2006 for the first time since the late 1990s, kept moving higher, and then took off at an accelerating pace from late 2007:  up 11 percent in the the fourth quarter, then 56 percent in the first quarter of 2008 an