Issues relating to biofuel are social, economic, environmental and technical problems that may arise from biofuel production and use. Social and economic issues include the "food vs fuel" debate and the need to develop responsible policies and economic instruments to ensure sustainable biofuel production. Farming for biofuels feedstock can be detrimental to the environment if not done sustainably. Environmental concerns include deforestation, biodiversity loss and soil erosion as a result of land clearing for biofuels agriculture. While biofuels can contribute to reduction in global carbon emissions, indirect land use change for biofuel production can have the inverse effect. Technical issues include possible modifications necessary to run the engine on biofuel, as well as energy balance and efficiency. The International Resource Panel outlined the wider and interrelated factors that need to be considered when deciding on the relative merits of pursuing one biofuel over another. The IRP concluded that not all biofuels perform equally in terms of their effect on climate, energy security and ecosystems, and suggested that environmental and social effects need to be assessed throughout the entire life-cycle.
Social and economic effects
Oil price moderation The International Energy Agency's World Energy Outlook 2006 concludes that rising oil demand, if left unchecked, would accentuate the consuming countries' vulnerability to a severe supply disruption and resulting price shock. The report suggested that biofuels may one day offer a viable alternative, but also that "the implications of the use of biofuels for global security as well as for economic, environmental, and public health need to be further evaluated". According to Francisco Blanch, a commodity strategist for Merrill Lynch, crude oil would be trading 15 per cent higher and gasoline would be as much as 25 per cent more expensive, if it were not for biofuels. Gordon Quaiattini, president of the Canadian Renewable Fuels Association, argued that a healthy supply of alternative energy sources will help to combat gasoline price spikes.
"Food vs. fuel" debate
Food vs fuel is the debate regarding the risk of diverting farmland or crops for biofuels production in detriment of the food supply on a global scale. Essentially the debate refers to the possibility that by farmers increasing their production of these crops, often through government subsidy incentives, their time and land is shifted away from other types of non-biofuel crops driving up the price of non-biofuel crops due to the decrease in production. Therefore, it is not only that there is an increase in demand for the food staples, like corn and cassava, that sustain the majority of the world's poor but this also has the potential to increase the price of the remaining crops that these individuals would otherwise need to utilize to supplement their diets. A recent study for the International Centre for Trade and Sustainable Development shows that market-driven expansion of ethanol in the US increased maize prices by 21 percent in 2009, in comparison with what prices would have been had ethanol production been frozen at 2004 levels. A November 2011 study states that biofuels, their production, and their subsidies are leading causes of agricultural price shocks. The counter-argument includes considerations of the type of corn that is utilized in biofuels, often field corn not suitable for human consumption; the portion of the corn that is used in ethanol, the starch portion; and the negative effect higher prices for corn and grains have on government welfare for these products. The "food vs. fuel" or "food or fuel" debate is internationally controversial, with disagreement about how significant this is, what is causing it, what the effect is, and what can or should be done about it. The world is facing three global crises, energy, food and environment. Changing the trend of recreation or population growth can impact each one of these. By increasing the world population, the ratio of energy and food demands will increase as well. So, it can put these two energy and food industries in completion of supplying. Developing the techniques and utilizing the food crops for biofuel production, especially in shortage areas, can adverse the competition between the food and biofuel industries. It can be cay that harvesting and producing biofuels crop on a large scale can put local food communities at risk, such as challenges to access lands and portions of the food. If the food economy cannot place safe and stable, protocols such as Kyoto can not meet their purposes and help control emissions.
Poverty reduction Researchers at the Overseas Development Institute have argued that biofuels could help to reduce poverty in the developing world, through increased employment, wider economic growth multipliers and by stabilising oil prices (many developing countries are net importers of oil). However, this potential is described as 'fragile', and is reduced where feedstock production tends to be large scale, or causes pressure on limited agricultural resources: capital investment, land, water, and the net cost of food for the poor. With regards to the potential for poverty reduction or exacerbation, biofuels rely on many of the same policy, regulatory or investment shortcomings that impede agriculture as a route to poverty reduction. Since many of these shortcomings require policy improvements at a country level rather than a global one, they argue for a country-by-country analysis of the potential poverty effects of biofuels. This would consider, among other things, land administration systems, market coordination and prioritizing investment in biodiesel, as this 'generates more labour, has lower transportation costs and uses simpler technology'. Also necessary are reductions in the tariffs on biofuel imports regardless of the country of origin, especially due to the increased efficiency of biofuel production in countries such as Brazil.
Sustainable biofuel production
Responsible policies and economic instruments would help to ensure that biofuel commercialization, including the development of new cellulosic technologies, is sustainable. Responsible commercialization of biofuels represents an opportunity to enhance sustainable economic prospects in Africa, Latin America and impoverished Asia.
Environmental effects
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