Biofuels Policy: What’s Sustainable?

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by Julia Olmstead • What does renewable energy really mean? And while we’re at it, what’s sustainability, anyway?

Seemingly simple questions, but they’re ones that crop up again and again as I get started in my work with the Rural Communities program.

Think Forward is a blog written by staff of the Institute for Agriculture and Trade Policy covering sustainability as it intersects with food, rural development, international trade, the environment and public health. The Institute for Agriculture and Trade Policy promotes resilient family farms, rural communities and ecosystems around the world through research and education, science and technology, and advocacy.

Take, for instance, a set of biofuels policy recommendations released last week by a coalition of five green NGOs, headed up by the Environmental Working Group. I’ve pasted them below.

The proposals amount to a series of safeguards to ensure that federal policy incentives—things like tax credits and subsidies—are tied to environmental performance standards. In other words, if the ethanol or biodiesel isn’t actually reducing greenhouse gas emissions or our dependence on foreign oil, its producers won’t get federal money for it.

Sounds pretty sensible, right? Indeed, the proposals are sensible. But in our view, they’re also too narrow.

Sustainability standards for biofuels and other rural-based renewable energy policies must take into account the economic concerns of family farmers. If we lose them—and overly aggressive (albeit well-intentioned) policy moves like eliminating the Renewable Fuels Standard (RFS) probably won’t help—we lose our best shot at both environmental sustainability and maintaining vibrant rural communities.

We applaud this group’s efforts, but we propose a couple of tweaks:

1. Policy incentives should be tied not just to environmental performance standards, but also to local and regional economic benefits.

2. Rather than eliminate the Renewable Fuels Standard, let’s view it as an opportunity to create and ensure a market for sustainably produced agricultural products. Mandates for local production and sourcing are a first step, along with a gradual shift of focus away from quantity, and toward economic and environmental quality.

I’ll be posting regularly about IATP’s bioeconomy work and analysis—check back soon.

From Environmental Working Group’s Web site.

1. Ensure that all policy incentives for renewable fuels, including mandates and subsidies, require attainment of minimum environmental performance standards for production and use, to ensure that publicly supported “renewable fuels” do not degrade our natural resources. Such standards would: certify net life-cycle greenhouse gas emission reductions through 2050, taking into account direct and indirect land use change; and do not cause or contribute to increased damage to soil quality, air quality, water quality, habitat protection and biodiversity loss. Compliance with these standards must be verified regularly.

2. Restrict the RFS to fuel options that do not cause environmental harm, adverse human health impacts or economic disruption.

o Cap the RFS at current levels and gradually phase out the mandate for biofuels, unless it is clearly demonstrated that such fuels can meet minimum environment, health and consumer protection standards.

o Establish feedstock- and technology-neutral fuel and environmental performance standards for all biofuels and let the market devise ways of reaching them.

o Periodically reevaluate the sustainability and performance of renewable fuels.

o Provide a mechanism and requirement to mitigate unintended adverse effects, including authority to adjust any mandate downward.

3. Tie the biofuels tax credits to the performance standards

o Phase out the biofuels tax credit to blenders while phasing in tax credits or subsidies for renewable fuels that are scaled in accordance to the fuels’ relative environmental, health and consumer protection merits.

4. Rebalance the U.S. renewable energy and energy conservation portfolio to reflect the relative contribution these options can make to reducing fossil fuel use, enhancing the environment, spurring economic development and increasing energy security.

o Subsidies to renewable energy and conservation should be distributed more evenly between alternative energy sources, and should be allocated in a manner that is fuel- and feedstock-neutral; biofuels, particularly corn ethanol, must no longer receive the lion’s share of federal renewable energy subsidies.

o New policy must:

* Emphasize energy conservation; we cannot drill or grow our way out of the energy crisis.

* Create a level playing field among renewable energy options; set fuel-, feedstock- and technology-neutral standards, so as to reduce fossil fuel consumption and greenhouse gas emissions, improve environmental quality and biodiversity, and reduce pressure on agricultural markets.

5. Support research to improve the analysis of net climate impacts, net non-climate environmental impacts, commodity price impacts and other social factors that are substantially affected by policies that promote biofuels. All of the previous policy asks must be based on better research on the impacts from biofuels; understanding these impacts are crucial to developing sound policies.

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