Biofuels: Economic and Environmental Perspective

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Table of Contents

Introduction
Arguments and counterarguments of biofuels
Arguments
Analysis
Assessment
Conclusion
Bibliography
Footnotes

Introduction

While the word “biofuel” became an instant catchword, expectations were high that a solution for the ever-inflated oil prices and environmental troubles had been found. Unfortunately, politicians, environmentalists, cultivators, and consumers are slowly accepting that the condition remains a bit unchanged. While the possibility of plant energy might perhaps be eco-friendlier, the fossil fuel that goes into planting, fertilising, and transporting biofuel plants and products smudge this image¹.

In addition, even though biofuels started partly as a way of assisting consumers burdened with high oil costs, large-scale production of biofuels might give way to high food costs. Whereas numerous corn and soy farmers are gaining from the biofuels trade, other industries are hurting on the other hand.

The prices for grain have stepped up as growing quantities of soy, sugarcane, and corn are redirected to the energy industry instead of being used by farm animals and in the food industry. The drawbacks of biofuels emerge at first glimpse nearly to overshadow the gains after considering the quantity of fossil fuel required in generating biofuels, outcomes of deforestation, emission of greenhouse gases, and consequential increase in the prices of foods,.

Even though the contemporary sources of biofuels are not promising, there is a practicable cause to pursue biofuels because sustainable and extra proficient biofuel alternatives are on the scope². Husks, algae, waste products, and grasses are the flaunted sources of fuel for the future. The only problem lies in the fact that, the requirements for expertise and costs incurred in processing these substances render the present mass-production quest impracticable.

The most biting question currently is how to make use of biofuels and at the same time not hurt the environment or consumers. Legislation ought to be thoughtful of the present and future actualities of the biofuels sector. This paper discusses arguments and counterarguments concerning biofuels from economic and environmental perspective, coupled with the way to assess the sustainability of biofuels.

Arguments and counterarguments of biofuels

The debate on biofuels centres on an investigation of the merits and demerits of making use of plants to generate fuel³. The arguments in favour of using biofuels might comprise decreased dependence on foreign oil, cutback of pollution, generation of a by-product that livestock might consume, and economic gain to farmers in the U.S. The counterarguments might comprise deforestation, vehicle safety concerns, soil erosion, augmented pollution, and augmented food costs.

Arguments

Decreased dependence on foreign oil

Dependence on foreign oil may be decreased if biofuels form even a small proportion of the gasoline utilised nowadays. Theoretically, this move might give the U.S. a special advantage when coping with nations in the Middle East. Nevertheless, the degree of the ability to which biofuels substitute fossil fuels is fairly low⁴. For instance, a report presented by the United Nations disclosed that, biofuels presently constitute just 0.9 percent of the fuel utilised for transportation.

Yet, further distressingly, by the year 2015, the International Energy Agency (IEA) predicts this proportion to move progressively to merely 2.3 percent. By the year 2030, the proportion of fuel obtained from biofuels employed in transportation will just be 3.2 percent.

These figures are greatly lesser than the anticipation of the public, derived from the gleaming stories, concerning biofuels, obtained from the media industry⁵. The proportion of fuel obtained from biomass seems small; nonetheless, even a 3 percent dislocation of foreign fossil fuel would have a considerable impact on the relationship of the U.S. with oil-rich nations.

Decreased pollution

It is likely that an augmented use of biofuels might decrease pollution, since biofuels are actually biodegradable, in addition to not being detrimental when discharged in the environment. The latency for cutback of greenhouse gasses is noteworthy, especially when the benefits of advanced biofuels like different kinds of cellulosic ethanol are deemed. Adding ethanol to fossil fuel creates gasoline that assists in reducing air pollution as it gives out less lead, sulphur oxide, and other kinds of polluting elements into the atmosphere, while the fuel is burning⁶.

Generation of a by-product that livestock might consume

A by-product in the process of making corn-obtained ethanol is Distiller’s Dried Grains (DDGs) or Grain Solubles (DDGS), which might be utilised as a feedstock for livestock such as pigs, cattle, and poultry due to their high-protein content. Given that the common requirement for corn hails from the necessity for feedstock, the application of ethanol might provide meat-producing animals with feedstock.

A study found that, DDGs supply an extra feed for livestock and thus farmers use it in counterbalancing higher corn prices as well as decreased availability, because corn is taken to ethanol industries⁷. If farmers could make use of DDGs and DDGS, then the elevated costs of corn could not distress them severely. In addition, consumers could also gain, as the price of meat could become less than it could when livestock farmers incur a much higher cost for corn.

Economic gain to farmers in the US

Farmers in the US will keep on enjoying economic gains from requirement for corn by biofuels manufactures for a time. If demand for biofuels in other parts of the world escalates, nations like the US would benefit from even more export returns.

The US is not a direct competitor to Brazil in the market of biofuels, since the beneficial biofuel crop of Brazil is sugarcane, whereas the beneficial biofuel crop of the US is corn. Both these crops (corn and sugarcane) are utilised in the manufacture of biofuels. The requirements for biofuels are extremely vast that none of these nations is in trouble of being locked out of the market⁸.

Counterarguments

The disadvantages of the use of biofuels like latently higher food costs, vehicle safety concerns, augmented deforestation, and pollution have forced the public to re-analyse the drive for a greater utilisation of biofuels.

Increase in food costs

One of the concerns concerning ethanol is the possibility of an increase in food costs. A steady move to corn past other crops reveals the high intensities of household corn-founded ethanol generation and increase in exports that maintain corn demand and generation returns sturdy⁹. Whereas the corn ethanol bonanza results into great returns for farmers, this kind of ethanol pushes up food costs.

While more corn is redirected to the generation of biofuels, the requirement for corn as foodstuff is strained by a reduced supply. Increasing food costs upset consumers in general, and they upset underprivileged consumers above all. The underprivileged are in particular susceptible to harm via hiking food costs, since the poor have a tendency of using bigger proportions of their profits on food items.

Vehicle safety issues

There are numerous performance and security issues associated with the application of biofuels in vehicle and aircraft engines. Whereas the utilisation of flexible fuels in vehicle seems trouble-free in the short-run, the long-term consequences on engines making use of biofuels are yet to be established.

A number of antagonists to augmented utilisation of biofuels argue that, engine performance might be considerably affected by the utilisation of a high proportion of biofuels¹⁰. A safety issue concerning the utilisation of biofuels in business airliners is that, biofuels are more liable to freezing if exposed to low temperatures when judged against fossil fuels.

Governments in various nations are presently undertaking studies intended to discover more concerning the consequences of biofuels on vehicle and aircraft engines in the end. Despite the fact that pilots have been on successful flights on biofuel-fuelled flights, most airlines are not set to utilise pure biofuels in flights pending gathering of more research.

Augmented deforestation and pollution

Sarcastically, one drawback of biofuels might be pollution. Biofuels could cause an augment in a number of pollutants since fossil fuels are utilised in the making of biofuels. The emission of greenhouse gases tops the list of environmental issues. High ethanol utilisation might give rise to transformations in land utilisation that could easily augment the release of greenhouse gases¹¹. Biofuels decrease reliance on imported oil, to some extent.

Additionally, the ethanol bonanza has generated rural employments and enriched a number of farmers and agribusinesses. However, the fundamental setback with the majority of biofuels is remarkably straightforward, viz. making use of land to produce fuel gives way to the ruin of grasslands, wetlands, and forests that store huge quantities of carbon. Regrettably, researchers have overlooked this aspect so far.

Analysis

This part comprises considerations of the arguments and counterarguments on biofuels. It also comprises an analysis of the officially authorised structures enclosing biofuels. As it will be discussed, the arguments in favour of biofuels outweigh the counterarguments of the same¹².

Although present legislations offer a helpful policy for the essential advancement of biofuels, expertise is yet to get closer to the legislative ambitions. Bringing in more expertise might be essential to conquer the status quo of corn-obtained ethanol. This could be pleasing as cellulosic ethanol is much environmentally pleasant than corn-obtained ethanol and causes less risk to food costs.

Enquiries are still a commonplace regarding the effectiveness of biofuels, even as the world requires a substitute to fossil fuel. The traditional corn-obtained ethanol heaps special setbacks concerning fertiliser, land utilisation, and energy required for production. In addition, redirecting corn for fuel might cause increased human food and livestock feed costs¹³.

The long run and short-run consequences of making use of biofuel are an additional and vital part of the biofuel debate. Biofuel plans, in the short-run, do not appear almost as eco-friendly as proponents initially anticipated. Fossil fuels are essential to the generation of biofuels at numerous phases, viz. sowing, fertilising, reaping, carrying, and processing. Inserting soil-erosion and deforestation to the formula makes biofuels appear catastrophic.

The short-run consequences of biofuel production might be distressing; nevertheless, the long-run gains might justify the unconstructive effects of the short-run original venture in biofuels. For example, most of the fuel (presently petroleum) utilised in the generation of biofuels might be prepared from plants. This could rely on the advancement of expertise making vehicles able to run on high proportions of biofuels.

Although soil erosion and deforestation would still be pertinent issues to address, petroleum might not be required to generate biofuels. Ultimately, in future, making of biofuels might probably be eco-friendlier than today for fossil fuel that presently goes into producing biofuels would be substituted by biofuels¹⁴. Biofuels will be cleaner and eco-friendlier after substituting fossil fuel with other eco-friendlier fuels in the production of biofuels.

When thinking of creating a biofuel world, corn-obtained ethanol, cellulosic ethanol, and waste-obtained ethanol should be analysed independently. Corn-obtained ethanol seems the cruddiest form of biofuel from both economic and environmental standpoints. Large quantities of petroleum-derived fertilisers and specific soil types are required to grow corn.

In addition, corn could cause shortage of food supply resulting to price hikes. The attractiveness of corn-obtained ethanol is that, farmers are set to grow enormous quantities of corn and the expertise to make corn-obtained ethanol green exists.

Waste-obtained ethanol and cellulosic ethanol cause strong short-run difficulties, but present considerable long-run benefits. Once the expertise turns the making and processing of biofuels green, their use will be both economically and environmentally friendly. Cellulosic ethanol possesses numerous economic and environmental benefits.

Given that algae and grasses can grow in lands set aside for cultivation, they will prevent the need of using agricultural land for fuel production, thus evading the difficulty of increasing prices of food¹⁵. With new advancements in expertise daily, there is no cause to discard the biofuel idea.

In fact, after the inactiveness of fossil fuel and vehicle industries is conquered, actual environmental development will be attained. In addition, when the fuel burned to form biofuel is itself biofuel, the energy sequence will turn into a more constructive one.

Assessment

Evaluation of the sustainability of biofuel is possible through application of new devices that permit users to carry out a self-evaluation, alongside the standards of the Roundtable on Sustainable Biofuels (RSB) and a self-hazard evaluation¹⁶. Online devices as well determine biofuel emission of greenhouse gases for every lifecycle generation stride, from cultivation to ultimate fuel supply; this computation can be carried out in accordance with different methodologies in new devices, which are directly available online and some are at no cost¹⁷.

The RSB offers the best tool for this assessment. The RSB device has twelve standards for sustainable production of biofuels, comprising environmental and economic principles like food prices. Under the Greenhouse Gas (GHG) emission standard, operators in every step in the production of biofuel should compute the GHG emissions of their processes. Such computations necessitate knowledge of life cycle assessment (LCA) of biofuels.

Diverse GHG computation methods applied include the RSB standard, and the European Renewable Energy Directive (RED) standard. The assessment tools are aimed at every stakeholder in the biofuels industry; for instance, crop farmers, traders, and biofuel producers that desire showing the sustainability of what they produce.

Conclusion

Different arguments in favour of biofuel and counterarguments have been discussed in this paper as well as analysis and stand in the debate concerning biofuel. More research is required to decide the economically and environmentally friendly ways to make use of biofuel and devise the expertise required in processing these fuels, since decisions concerning biofuels will directly influence the environment and the economy¹⁸.

Cellulosic biofuels cause fewer impediments to food supply and prices, and are greener than corn-obtained ethanol. Although biofuels have the likelihood of decreasing pollution, it is essential to think about their influences on economy and the environment.

The utilisation of corn-obtained ethanol must reduce in ratio to the accessibility of other current biofuels with less environmental drawbacks. Once the essential expertise is built to utilise these more recent biofuels, the venture in biofuels will be exceedingly satisfying.

Bibliography

Ajanovic, Amela. “Biofuels versus food production: Does biofuels production increase food prices?” Energy 36, no. 4 (2011): 2070-2076.

Brueckner, Martin. The business with the environment: A (different) reader. South Melbourne: Cengage Learning Australia, 2011.

Gasparatos, Alexandros, Per Stromberg, and Kazuhiko Takeuchi. “Biofuels, ecosystem services and human wellbeing: Putting biofuels in the ecosystem services narrative.” Agriculture, Ecosystems & Environment 142, no. 4 (2011): 111-128.

Gomiero, Tiziano, Maurizio Paoletti, and David Pimentel. “Biofuels: Efficiency, Ethics, and Limits to Human Appropriation of Ecosystem Services.”Journal of Agricultural & Environmental Ethics 23, no. 5 (2010): 403-434.

Hochman, Gal, Deepak Rajagopal, and David Zilberman. “The Effect of Biofuels on the International Oil Market*.”Applied Economic Perspectives & Policy 33, no. 3 (2011): 402-427.

Holleman, Hannah. “Energy Policy and Environmental Possibilities: Biofuels and Key Protagonists of Ecological Change*.” Rural Sociology 77, no. 2 (2012): 280-307.

Huang, Jikun, Jun Yang, Siwa Msangi, Scott Rozelle, and Alfons Weersink. “Biofuels and the poor: Global impact pathways of biofuels on agricultural markets.” Food Policy 37, no. 4 (2012): 439-451.

Karlen, Douglas, and Brian Kerr. “Future Testing Opportunities to Ensure Sustainability of the Biofuels Industry.” Communications in Soil Science & Plant Analysis 43, no. 2 (2012): 36-46.

Lin, Jolene. “Governing Biofuels: A Principal-Agent Analysis of the European Union Biofuels Certification Regime and the Clean Development Mechanism.” Journal of Environmental Law 24, no. 1 (2012): 43-73

Rajgor, Gail. “Biofuels bottleneck: With an increased focus on biofuels as an energy solution, have policy makers been too optimistic about how soon second-generation biofuels can be developed?” Renewable Energy Focus 12, no. 6 (2011): 66-71.

Romppanen, Seita. “Regulating Better Biofuels for the European Union.” European Energy & Environmental Law Review 21, no. 3 (2012): 123-141.

Snow, Allison, and Val Smith. “Genetically Engineered Algae for Biofuels: A Key Role for Ecologists.” BioScience 62, no. 8 (2012): 765-768.

Vimmerstedt, Laura, Brian Bush, and Steve Peterson. “Ethanol Distribution, Dispensing, and Use: Analysis of a Portion of the Biomass-to-Biofuels Supply Chain Using System Dynamics.” PLoS ONE 7, no. 5 (2012): 1-18.

Footnotes

¹ Gail Rajgor, “Biofuels bottleneck: With an increased focus on biofuels as an energy solution, have policy makers been too optimistic about how soon second-generation biofuels can be developed?” Renewable Energy Focus 12, no. 6 (2011): 66-68.

² Jikun Huang, Jun Yang, Siwa Msangi, Scott Rozelle, and Alfons Weersink, “Biofuels and the poor: Global impact pathways of biofuels on agricultural markets,” Food Policy 37, no. 4 (2012): 439-451.

³ Gal Hochman, Deepak Rajagopal, and David Zilberman, “The Effect of Biofuels on the International Oil Market,” Applied Economic Perspectives & Policy 33, no. 3 (2011): 402-427.

⁴ Jolene Lin, “Governing Biofuels: A Principal-Agent Analysis of the European Union Biofuels Certification Regime and the Clean Development Mechanism,” Journal of Environmental Law 24, no. 1 (2012): 43-73.

⁵ Hannah Holleman, “Energy Policy and Environmental Possibilities: Biofuels and Key Protagonists of Ecological Change,” Rural Sociology 77, no. 2 (2012): 280-285.

⁶ Laura Vimmerstedt, Brian Bush, and Steve Peterson, “Ethanol Distribution, Dispensing, and Use: Analysis of a Portion of the Biomass-to-Biofuels Supply Chain Using System Dynamics,” PLoS ONE 7, no. 5 (2012): 1-11.

⁷ Allison Snow, and Val Smith, “Genetically Engineered Algae for Biofuels: A Key Role for Ecologists,” BioScience 62, no. 8 (2012): 765-768.

⁸ Alexandros Gasparatos, Per Stromberg, and Kazuhiko Takeuchi. “Biofuels, ecosystem services and human wellbeing: Putting biofuels in the ecosystem services narrative,” Agriculture, Ecosystems & Environment 142, no. 4 (2011): 111-128.

⁹ Tiziano Gomiero, Maurizio Paoletti, and David Pimentel, “Biofuels: Efficiency, Ethics, and Limits to Human Appropriation of Ecosystem Services,” Journal of Agricultural & Environmental Ethics 23, no. 5 (2010): 403-410.

¹⁰ Gomiero, Paoletti, and Pimentel, 411-434.

¹¹ Douglas Karlen, and Brian Kerr, “Future Testing Opportunities to Ensure Sustainability of the Biofuels Industry,” Communications in Soil Science & Plant Analysis 43, no. 2 (2012): 36-46.

¹² Seita Romppanen, “Regulating Better Biofuels for the European Union,” European Energy & Environmental Law Review 21, no. 3 (2012): 123-126.

¹³ Rajgor, 69-71.

¹⁴ Holleman, 286-307.

¹⁵ Amela Ajanovic, “Biofuels versus food production: Does biofuels production increase food prices?”Energy 36, no. 4 (2011): 2070-2076.

¹⁶ Romppanen, 127-141.

¹⁷ Martin Brueckner, The business with the environment: A (different) reader, (South Melbourne: Cengage Learning Australia, 2011), 35-56.

¹⁸ Vimmerstedt, Brian Bush, and Steve Peterson, 12-18.

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