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The Impacts of Tropical Biofuel Production on Land Use

Staff involved: Charles Palmer|

In collaboration with: Saraly Andrade de Sa (Ph.D. Candidate, ETH Zurich, Switzerland); Prof. Stefanie Engel (ETH Zurich); Center for International Forestry Research (CIFOR), Brazil.  

Funding: (1) Professorship in Environmental Policy and Economics, ETH Zurich; (2) Commission for Research Partnerships with Developing Countries (KFPE), Switzerland; (3) Research Fellow Partnership Programme for Agriculture, Forestry and Natural Resources (RFPP), ETH Zurich. 

There are two emerging trends with regards to rising global demand for biofuels and land use. First, the increase in production of biofuel feedstock demands more land thus placing direct pressure on potential agricultural land currently still under forest cover. Second, the reallocation of agricultural land for biofuels along with other factors such as increasing human populations have led to rising demand and hence, higher prices for agricultural commodities and other foodstuffs. Consequently, rising biofuel demand may be indirectly leading to the expansion of food production into forest frontiers.

To date, most research to evaluate biofuels have focused on their merits for reducing greenhouse gas emissions or fossil fuel use. Focusing on emission or energy use, however, ignores the full range of environmental impacts of biofuels particularly where forests are being felled to make way for biofuel crops. Not only is the carbon storage capacities of forests destroyed but also biodiversity and other environmental services are likely to be lost as well. Many of the economically important biofuels, including Brazilian sugarcane ethanol and Indonesian/Malaysian palm-oil diesel, have greater aggregate environmental costs than fossil fuels. However, there are a number of important indirect effects of biofuels, whether environmental or social, e.g. rising food costs. The empirical evidence for these remains poor. This project aims to empirically demonstrate the strength of the direct and indirect effects of biofuel production on land-use at the forest frontier.

First, the economics of land-use will be developed in order to better understand decision-making in the production of commodities. Second, and on the basis of land-use economics, an econometric model will be estimated using secondary market and remote sensing data. Expert interviews will be conducted to complement the quantitative analysis. Given its leading position in biofuel markets, Brazil has been chosen as the research site of interest for this project. The current lack of quantitative analyses on the impacts of biofuel production on land use, deforestation and food production implies that research outputs could potentially contribute not only to the policy debate on the supposed environmental benefits of biofuels as a strategy to help mitigate climate change but also to the food vs. fuel debate.

Tropical Biofuel Production research in Brazil