Bioethanol can help poorer economies

Biofuels are attractive not just because of their potential to help reduce climate change. They also present ways for developing countries to enter a potentially lucrative market. Some developing states have caught on to this and begun turning their attention to growing crops which can be turned into biofuels.

Brazil is the leader among this group producing 16.5 billion litres of fuel ethanol, or 45.2% of the world’s total, in 2005. Sugar-cane, which can be used to produce bioethanol, employs around one million workers in Brazil and this number is expected to rise by 204,000 in the next five years, according to a recent study by the International Institute for Environment and Development (IIED). Most of these jobs are held by low-skilled workers in rural areas.

The Colombian government estimates that families will earn twice the minimum salary through bioethanol production, while in China the industry is expected to create up to 9.26 million jobs.

Malaysia and Indonesia have also begun focusing on biofuels through palm oil production while the Philippines is expanding coconut production.

According to the Worldwatch Institute, biofuel production is also beginning in Benin, Ethiopia, Ghana, Guinea Bissau, Kenya, Malawi, Mozambique, Nigeria, Senegal, South Africa and Zimbabwe.

Biofuels do not just present employment benefits for developing countries but they can also reduce the dependency of poorer states on expensive fossil fuels. "Biofuels can help replace developing countries’ own fossil fuel consumption. They pay the same prices for fuel that we pay," says Stephan Singer, head of climate and energy policy at WWF, the conservation group.

But some analysts point to the potentially negative effect of biofuel and biomass production on the developing world.

"The cultivation of energy crops could cause or exacerbate environmental problems associated with agricultural commodity production. Of these, the expansion of the agricultural frontier is a key concern, especially the impacts it may have on tropical forests, savannahs and biodiversity," according to the IIED study. Deforestation, overuse of fertilisers and pressure on scarce water supplies are among the concerns.

On the social side, there are concerns about child labour and exploitation.

But Singer believes it is wrong to single out the production of energy crops for having negative environmental and social effects. "These issues are linked to all kinds of agricultural products which are imported into OECD [Organisation for Economic Co-operation and Development] countries," he says.

One important concern with biofuel production is the impact on world food prices since sugar, corn or oil are all by-products in the process. "They compete with local food prices and drive prices up. This has an impact on the rural poor," says Singer. But he adds that this is possibly a short-term factor and the move to second-generation crops, such as grasses and woody crops, will remove this problem. These crops can be grown in dry lands and semi-desert conditions and so have big potential for production in many developing countries. As they depend less on water and fertilisers, the environmental impact will also be reduced.

Biofuels are attractive not just because of their potential to help reduce climate change. They also present ways for developing countries to enter a potentially lucrative market. Some developing states have caught on to this and begun turning their attention to growing crops which can be turned into biofuels.

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