Today the NY Times and my favorite source of ag news, Farm Policy, report on how the EU is going to stick to its 10 percent goal for biofuels but require an increase percentage to be advanced biofuels that don't compete with food production. Good for the EU; we did that back in December of last year when we updated the RFS. We're still pushing more aggressively here--the EU will only require that 40% of the their mandate come from advanced biofuels, while we require 21 billion gallons of our 36 or nearly 60% comes from advanced biofuels.
Another difference is that while the EU change focuses on not interfering with food production, our policies focus on avoiding global warming pollution, but actually should largely take biofuels out of the food price equation. I recently gave a presentation that made this point, which you can see below. The basic point is that because our law requires that land-use emissions be included in that accounting for greenhouse gas emissions, biomass feedstocks that displace food on to land cleared from natural ecosystems get dinged for the carbon that is released when that land is cleared. This will create a serious disincentive to using those feedstocks.
View SlideShare presentation or Upload your own. (tags: biofuels food)
One of the great questions that I often get asked about including these land-use emissions is wouldn't it be better to regulate these emissions directly rather than trying to influence them through biofuels policy. And the answer is definitely. In any pollution cap policy the issue of "leakage" is always a challenge. (If you cap the emission here, do they just move there?) And the first, best solution is to expand the cap (include here and there), but that's not always possible.
So if land-use emissions from our biofuels policies are leaking out to Brazil and Indonesia and Nigeria and from biofuels crops to food crops, the ideal would be to include land-use emissions around the world from agriculture and forestry under a mandatory carbon cap and trade system. And eventually we have to get there, or something effectively equivalent, if we're going to save the world from climate change. But that's going to take a while to negotiate. In the meantime, given the scale of potential emissions (not to mention the food price concerns) from land-use change, we simply cannot afford to ignore it.
Which brings me to my final points, which is my sincere hope that the biofuels industry, especially the nascent advanced biofuels companies, will recognize the environmental urgency of addressing these emissions and the PR value of embracing policies that reduce global warming pollution and food price concerns. In the news about the EU change, the industry folks gripe and whine. They should be saying "40%? heck, we want to be 100%."
Earlier this week, Greenwire (subscription required) reported on an Accenture report on the biofuels prospects and challenges. According to the article by Nathanial Gronewold:
The Accenture report suggests that challenges facing the biofuel industry have less to do with its economic feasibility and more to do with government policy and consumer acceptance.
and
... [D]eveloping a fully mature and international market for biofuels will only succeed, the report says, if the industry can encourage the right government policies and overcome negative consumer sentiment, especially with regard to the "food vs. fuels" debate and controversy over high food costs.
So if popular opinion is threatening to go against you, your financial existence and future depend on government policies, and for now the government is willing to mandate the use of your product if you do it right (which therefore allows you to internalize the cost of doing it right), do you
- a) try to argue with everyone that they shouldn't be worried about food and global warming and risk getting labeled part of the problem, or
- b) say "yes we can" and win hearts and minds by doing even better?
The answer seems obvious to me.