Business Daily from THE HINDU group of publications
Thursday, Jul 13, 2006
Business Daily from THE HINDU group of publications Thursday, Jul 13, 2006 |
|
|
|
|
|
|
|
Agri-Biz & Commodities
-
Events Industry & Economy - Non-conventional Energy Experts moot 4 steps to boost bioenergy benefits G. Chandrashekhar
Way ahead Farmers could get higher prices but low income consumers will be hit. Biofuels could spur both reductions in poverty and carbon emission. But a strictly market-based approach may not achieve much.
Chennai , July 12 With the G-8 leaders' meet to discuss the challenges of rising gas prices, the need for stable energy supplies and the threat of global warming, biofuels are enjoying centre-stage . But, with the spotlight come critical questions. If agricultural land is increasingly diverted for production of biofuel crops, will it impact production of food crops? Will it lead to higher food prices? Or will it provide new income opportunities for poor farmers? The answers are not clear-cut.
Risks and rewards
Increased production of biofuels poses risks and difficult trade-offs. Biofuel production offers real benefits for the agricultural sector, providing new markets for farmers' produce, but its impact on poverty, hunger and the environment is less clear, assert Mr Peter Hazell, visiting professor at Imperial College, London and Mr Joachim von Bruan, Director General of Washington-based International Food Policy Research Institute. The environmental benefits are also in question. As biofuels use a great deal of energy in their production, there is doubt whether they significantly reduce carbon emissions, the experts add. These questions are particularly relevant for a developing economy such asIndia. The country currently ranks sixth in energy demand worldwide. If India continues to consume oil at the current rate, by 2030 it is estimated that 94 per cent of its petroleum will have to be met by imports. Also, 43 per cent of India's population has no access to clean cooking fuels. According to Prof Hazell and Dr Von Bruan, while many developing countries lack the natural resource base to justify significant production of bioenergy crops, for countries such as India, which indeed is in a position to generate biofuels, diversion of land and water away from food and feed crops could lead to higher food prices.
Higher food prices
While higher food prices would be beneficial to farmers who produce more food than they eat, they would be detrimental to low-income consumers as well as small-scale farmers who purchase more food than they produce, the experts argue adding that since poor people spend a much larger share of their budget on food than energy, the trade-off between lower energy prices and high food prices offers them no benefit. In theory, biofuels could spur both reductions in poverty and carbon emission. However, a strictly market-based approach may not achieve much. Leaving bioenergy development entirely to the private sector would probably lead to economically efficient production and processes, but may fail to achieve important environmental and social goals.
Careful management
To meet these goals, biofuel development will require careful management and public sector support. In a paper titled "Can biofuels improve the environment and reduce poverty?" which the authors shared with Business Line, Prof Hazell and Dr Von Bruan see four broad strategies to enhance the economic, environmental and social benefits of bioenergy in developing countries. First, reduce the trade-off between bioenergy crops and food production. For example, by breeding crops that yield much higher amounts of energy per hectare or unit of water; developing methods to use by-products or waste from food crops to generate bioenergy; focusing on marginal rather than prime agricultural areas - an approach that would benefit some of the poorest people in less-favoured areas; investing in technologies that increase the productivity of food crops, which would make free additional land and water for energy crops. Second, encourage smaller-scale and rural-based production and processing, which would be more beneficial for the poor than large-scale and urban-based processing. This approach would help meet local energy needs in rural areas and could provide new markets to smallholder farmers, in addition to reducing the energy needed to transport bulk bioenergy crops, the authors argue. Third, overcome the high initial costs of producing and using biofuels. The authors recommend designing an end-to-end solution for a viable biofuel industry, including massive and coordinated investments not only by farmers and processors, but also by users and intermediaries (consumers, car manufacturers, distributors and even auto repair shops). Fourth, enhance market incentives for greater environmental and social benefits. Effective approaches include taxes, subsidies, regulation, publicly funded research and development, intellectual property protection and market for carbon payment. Public-private partnership could be the way forward.
More Stories on : Events | Non-conventional Energy
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|