Corn ethanol supporters’ claims that the fuel reduces greenhouse gas emissions are tenuous, at best. But corn ethanol might end up being the key to getting climate policy—specifically, the Waxman-Markey cap and trade legislation—through Congress.
House Democratic leaders have vowed to move forward on the legislation, but a group of farm state representatives, including House Agriculture Committee Chair Collin Peterson (D-MN), are threatening to derail the bill.
They mainly want two things: for agricultural offsets to be regulated by the USDA, not the EPA (although as of now, Waxman-Markey does not include the role of farms or forests in emissions reductions scenarios); and to get indirect land use change out of the formula for calculating biofuels’ greenhouse gas emissions in the revised Renewable Fuel Standard (the RFS2 is part of the 2007 energy bill, and has nothing to do with Waxman-Markey). See my blog post related to indirect land use change here.
Rep. Peterson and the mainstream agriculture lobby don’t trust the EPA on agriculture, a feeling that was heartily confirmed when the agency made the decision to include indirect land use in the revised RFS. EPA-controlled climate credits, therefore, scare the heck out of them.
Peterson introduced a bill on May 14 that would ban indirect land use change from the RFS2, but despite its 46 co-sponsors, there’s been no sign yet from Congress that they’ll reopen negotiations on that part of the 2007 energy legislation. There’s no question, however, that Peterson and his supporters make up a large enough group to successfully stop Waxman-Markey if they so choose.
Whether Peterson gets his way on indirect land use or not, it’s clear that U.S. climate policy— both politically, as well as practically—will have to walk hand-in-hand with U.S. agriculture policy to succeed. We'll write more soon on the connection between agriculture and climate policy, and specifically on the ways agriculture can play an important role in mitigating climate change.
Despair abounds in the ethanol industry after the California Air Resources Board (ARB) voted 9 to 1 in favor of the so-called Low Carbon Fuel Standard (LCFS) last week. The regulation aims to reduce greenhouse gas emissions from transportation fuels 10 percent by 2020.
Taking firm steps toward greenhouse gas emissions reductions is, of course, a good thing. But the new law could potentially cross corn ethanol off the list of fuel options for not only California but also the 11 states planning to adopt programs modeled on the LCFS.
The LCFS will rate the carbon intensity of different transportation fuels by calculating carbon emissions during each fuel’s production, transportation and consumption. Fuel refiners, blenders and distributors will be required to phase out high carbon intensity fuels or to purchase credits from utilities companies selling low-carbon electricity to power electric cars.
Greenhouse gas emissions from consuming and even transporting a fuel are pretty easy to measure. What are much harder to calculate—and far more controversial—are the emissions caused by a fuel’s production.
The biofuels industry has cried foul over ARB’s inclusion of emissions from what’s known as biofuels’ “indirect land use change” effect. Indirect land use change (ILUC) is an attempt to calculate the effect ethanol production has beyond just the land where the corn is grown and the refinery where it’s processed.
According to the scientists ARB commissioned to calculate ILUC, when American farmers sell their corn to ethanol plants, bypassing traditional food and feed markets, farmers on the other side of the globe cut down rainforests and plow up grasslands to plant crops to fill the gap. The resulting release of carbon dioxide from decomposition of exposed organic soil is large, many researchers argue, and must be included in corn ethanol’s carbon footprint.
It’s not so simple, say ethanol producers and a different set of scientists. Not only is it almost impossibly difficult to accurately quantify the influence U.S. farmers’ actions have on decisions made a world away (how do you sift out other market pressures, politics, etc?), but also, say the critics, the ILUC burden falls unfairly on biofuels: no one is calculating the indirect emissions of petroleum, for example (add up the emissions created by our military in defense of our oil supply, and the number would likely be significant).
I’ve struggled with this one as I’ve watched the lead-up to this decision. Prominent scientists on each side have sent compelling letters to ARB defending or decrying ILUC. I’ve watched heated debates between ILUC inclusion’s defenders and those that support the ethanol industry. I’ve seen public policy students here at UC Berkeley, where I’m a graduate student (in journalism, not public policy), furrow their brows and scratch their heads over its muddled-ness.
How, then, to think about it?
The easiest part is this: to applaud California’s leadership on carbon emissions reductions, something we desperately need bold action on. After that, things get trickier. Clearly, indirect land use change exists, and it’s something we need to address. But is it responsible or useful to quantify this for policy? I’m not sure that it is. The work that’s been done on these calculations (much of it by UC Berkeley professors) has been good. But if you read the literature, you’ll find that an awful lot of uncertainty, unknowns and assumptions go into the calculations. That’s okay for academic work—a process of continual refining, debate, review, revision—but it’s problematic when it comes to policy that will have a big impact on the biofuel industry (and here I’m thinking most about the farmers who either grow biofuel crops, have a stake in local refineries, or both).
The critics here might say, “Well, what’s the alternative?” or “As compared to what?”
I don’t think it’s an either/or.
Until we can figure out a way to accurately calculate ILUC and other fuels’ indirect effects in a way that has—if not consensus—broader scientific and stakeholder support, ARB and eventually the EPA (who is watching this closely as a possible model), would be better off making carbon emissions reductions and indirect land use change two different issues.
ARB has committed to reviewing again the carbon intensity calculations before the LCFS becomes binding in January 2011. Let's hope they will decide to include only biofuels’ direct emissions, as they do for other fuels. Then let's enter into a separate dialogue—with separate policy initiatives—to work on indirect land use change and the indirect effects of other fuels. Let the scientists continue the ILUC debates, and let the stakeholders—both here and abroad—come together to find immediate ways to tackle the actual problem of ILUC.
My guess is that we’d make more progress on both fronts.
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.
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.
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.
Ian Austen of the New York Times had an excellent article Wednesday on oil extraction from the tar sands in Alberta, Canada. Canada is now the largest oil supplier to the U.S. The article outlines the various environmental concerns of this extremely energy intensive operation, including impacts on greenhouse gas emissions, water pollution and migratory birds.
One important driver the article doesn't get into is the role of NAFTA in tar sands development, or more specifically the role of NAFTA's Proportionality Clause (see analysis by the Parkland Institute and the Canadian Centre for Policy Alternatives). This clause is so crazy it's hard to believe. It actually requires Canada to make two-thirds of its domestic oil production and 60 percent of its current natural gas production available for export to the U.S. These requirements stay in effect, even if Canada needs these supplies for domestic purposes. There is little question that Canada's NAFTA-burden is contributing to further tar sands development.
Shifts in the marketplace toward more environmentally friendly products are happening because larger institutional buyers are demanding it. By working with local governments, hospitals, schools and large businesses, civil society groups are expanding markets for greener production and products.
The Mainstreet Media Project has put together a wonderful hour-long show on green purchasing. It features Chris Geiger (who discusses what the City of San Francisco is doing in green purchasing and non-toxic pest management), Gary Cohen (co-director of the coalition Healthcare Without Harm, of which IATP is a member) and Dean Edwards (of Kaiser Permanente).
Also on the show, IATP's David Wallinga, M.D., discusses the role of local food purchasing by larger institutions to help spur demand and meet healthier food objectives. You can listen to David's interview or the whole show.
Earlier this week, ten Canadian civil society groups called on political candidates running in Canada's October 14 election to "stop ducking Obama's NAFTA challenge." Specifically, the groups asked for candidates to respond to U.S. Senator Barack Obama's pledge to renegotiate the North American Free Trade Agreement (NAFTA) if elected President.
The Canadian groups zeroed in on a number of key provisions of NAFTA that need renegotiation, including the energy chapter's "proportionality clause," which compels Canada to export oil and natural gas at a set rate to the U.S., even if it results in domestic shortages. It is NAFTA's proportionality clause that is partially driving the controversial and energy-intensive development of oil tar sands in Alberta. IATP's newsletter, Tar Sands Oil Review, is monitoring the issue.
The Canadian groups also called for the renegotiation of NAFTA's investment chapter (also known as Chapter 11), which grants corporations the right to sue governments in all three countries (through unelected and secret trade tribunals) to challenge regulations they disagree with. There have been over 50 such Chapter 11 cases filed under NAFTA.
The "chicken or the egg" challenge of expanding renewable energy based on biomass has to do with finding a reliable source of biomass itself. We can't make the transition to using more biomass without a reliable supply. But it's difficult to find the supply, without the facilities to send it to?
One way out of this conundrum is to look where biomass is already being harvested and discarded as waste. A new IATP study released today reports on a series of test forest biomass harvests that target the removal of understory vegetation and dead material. An excess of this material can increase fire risks and hinder the health of the forest. Traditionally, that material (known ominously as the fuel load) has been removed and just disposed of or burned near the site.
The study found that at six of the nine test harvests, removing the biomass to reduce fire risks and using it for renewable energy production reduced overall costs. Researchers also found that by following sustainable harvest guidelines established by the Minnesota Forest Resource Council, adverse environmental effects on the soil, wildlife and other natural resources can be avoided.
IATP worked with the University of Minnesota, University of Wisconsin-Stevens Point, and the U.S. Forest Service on the project. You can read the Executive Summary, press release, and an interview with lead author, IATP's Don Arnosti.
Minnesota recently passed legislation to increase the biodiesel content of diesel fuel sold in the state from the current 2 percent to 20 percent by 2015. The Institute for Agriculture and Trade Policy, together with Minnesota farm and environmental organizations, worked with legislators to make sure that the mandate, which is the highest in the nation, will not only support the biodiesel industry, but will also specifically benefit Minnesota’s economy and environment and help us move forward towards the next generation of biofuels.
While the merits of mandates are debatable, if they are going to be put in place, they must incorporate provisions to ensure that Minnesota's farmers, economy and environment are the beneficiaries - not just a few multinational processors.
In particular the legislation included:
Here is the full text of the bill:
The biofuel sector has grown so rapidly around the world, we are all still coming to grips with its impact - both good and bad - on the farm and food economy. A new report by IATP's Dr. Dennis Keeney and Claudia Nanninga finds that the first generation of biofuel feedstocks is exacerbating many of the environmentally-destructive practices of the current industrial model of agriculture. Specifically, the biodiversity of several of the major biofuel-producing countries is being threatened as feedstock production extends onto native vegetation.
Below is a press release from today:
Biofuels Contributing to Changing Land-Use Patterns, Affecting Biodiversity – New Report
Minneapolis – Increasing production of crops for biofuels is exacerbating agriculture’s impact on biodiversity in many parts of the world, finds a new report by the Institute for Agriculture and Trade Policy (IATP).
The report, “Biofuel and Global Biodiversity,” is by Dr. Dennis Keeney and Claudia Nanninga and is available at: www.iatp.org. The paper includes case studies of three regions that have been growing much of the feedstock for biofuels around the world: the U.S., Brazil and Malaysia/Indonesia.
“Ethanol and biodiesel are being overlaid on a broken agricultural production system,” said Dr. Keeney. “Many of the biodiversity impacts of biofuel feedstock production are not inherent to biofuel, but are more a symptom of damaging agricultural production systems and policies.”
The report found that in the U.S., increased corn planting is reducing the diversity of crop rotations and threatening wetlands and acreage set aside for conservation. In Brazil, greater sugarcane production for ethanol is moving into the fragile, diverse Cerrado region, and soy production for biodiesel is contributing to significant destruction of the Amazon rainforest. Perhaps the largest loss of biodiversity is occurring in the rainforests of Malaysia and Indonesia, where palm oil plantations are rapidly being established to feed the growing demand for biodiesel in Europe and elsewhere.
The paper found that the biofuel industry has expanded due to two complementary drivers: the increase in the price of crude oil and national policies to encourage the production and use of biofuel. It concluded that future policy solutions need to focus on:
- Protecting rainforests and fragile, native ecosystems and indigenous lands – The most significant biodiversity threat is from biofuel feedstock production that extends onto native vegetation;
- Making sustainability a priority in all biofuel production – Policies should encourage more sustainable production of existing biofuel feedstocks – and accelerate the transition to more sustainable next generation biofuel feedstocks;
- Moderating price volatility in agricultural commodities – An updated supply management system could stabilize market prices and reduce incentives to encroach on native vegetation;
- Redesigning our agricultural and energy sectors – Agriculture and energy policies should prioritize local production and use.
“Public policy has been a major driver in the development of the biofuel industry,” said Jim Harkness, IATP President. “In moving forward, smarter policy is crucial if biofuel production is going to protect and enhance – rather than decimate – global biodiversity.”
The global biofuel market has grown so quickly that international trade and investment rules aren’t prepared to handle the multiple challenges arising from this new sector. As an example, the World Trade Organization treats ethanol and biodiesel very differently under its rules. At the same time, the clearing of land to meet the growing need for biofuel feedstocks is causing a host of environmental problems, including threats to water and biodiversity (a topic IATP will tackle in an upcoming report).
In a new paper published with our friends at the International Institute for Environment and Development, IATP’s Sophia Murphy outlines how global rules will shape the biofuel market and how new rules are needed to support environmental sustainability, rural development and human rights. Below is our press release on the paper from today:
Global Trade Rules to Shape Biofuel Market
Minneapolis – The long-term sustainability of the fast-moving global biofuel market will depend on changes to international trade and investment rules that govern energy, environment, agriculture and rural development, according to a new paper published by the Institute for Agriculture and Trade Policy (IATP) and the London-based International Institute for Environment and Development (IIED).
“This industry has developed so quickly that governments at all levels, but particularly at the global level, have been slow to set rules on how to manage its growth,” said Sophia Murphy, IATP Senior Advisor and author of the paper. “It is critical that governments set global rules that support environmental sustainability and economic development for more than just a few companies.”
The paper, “The Multilateral Trade and Investment Context for Biofuels: Issues and Challenges,” outlines the different interests of the largest global players in the biofuel market, including the U.S., European Union and Brazil. The paper analyzes biofuel trade within the context of World Trade Organization rules governing agriculture, environmental goods, services, patents and investment. Biofuels raise a number of tricky trade questions, including: the acceptability of production and processing methods (PPMs) as a basis for discrimination among goods; the legitimacy of trade restrictive measures that support goals set in multilateral environmental agreements; and the effects of private standards on market access.
Current biofuel feedstocks are energy-intensive and involve largely industrial-scale monocultural production. In parts of the world, biofuel feedstock production is taking a heavy environmental toll on water, soil, and ecological biodiversity. Investment from foreign firms seeking biofuel feedstock is also aggravating land disputes and intensifying the political fight to protect food security. The paper discusses some of the issues on developing sustainability standards for biofuel production and calls for a multilateral discussion to set trade and investment rules that support a fair and sustainable biofuel sector.
“International guidelines could complement what will ultimately be local and national decisions,” said Murphy. “Such guidelines could carve out space for policies that are dictated by human rights and environmental norms, and could help to reshape trade and investment obligations to be more supportive of sustainable development.”
The paper can be read at: www.iatp.org.
The Institute for Agriculture and Trade Policy works at the intersection of policy and practice to ensure fair and sustainable food, farm and trade systems for all people. www.iatp.org. IIED is an independent, non-profit research institute working in the field of sustainable development at the local, national, regional and global level. www.iied.org.