Perspective: Shoddy Environmental Bookkeeping—Biofuels and Indirect Land Use Change
3 April 2009
Perspective by Professor Bruce Dale, Michigan State University
Until early last year, it was widely accepted that biofuels such as ethanol significantly reduce total greenhouse gas (GHG) emissions compared to gasoline. Then, a high-profile study using indirect land use change (ILUC) analysis suggested biofuels may have worse GHG performance than petroleum-based fuels. An uproar resulted in the related academic and business communities. Today, the issue is still far from resolved.
The basic idea behind ILUC is that biofuels use crops that might otherwise go to traditional uses, such as animal feed. The world agricultural system responds to this “loss” by replacing the production. During this replacement process, new lands might be cleared for agriculture, resulting in very large GHG releases (e.g. from burning tropical forests). This hypothetical GHG release is called the “carbon debt”. This “ah-hah moment” was embraced by critics of biofuels.
What is important to understand here is that ILUC is not based on the actual biofuel supply chain. If land is cleared to produce a given biofuel, then that effect is already included in the biofuel’s lifecycle GHG emissions. Instead, the GHG emissions from land use changes are actually due to making other products. ILUC proposes that these GHG emissions be counted as part of the biofuel life cycle.
This is shoddy bookkeeping. To put it mildly, ILUC analysis is difficult and depends on numerous assumptions. Varying these assumptions can change the resulting “carbon debt” from negative (net GHG release) to positive (no net GHG emissions). Instead of focusing on the technical details, however, let’s consider two market examples and one policy example of indirect effects analysis. These illustrate the controversial premise behind indirect effects analysis, of which indirect land use analysis is just one example.
Let’s say an automaker makes more battery-powered electric vehicles, thus using more nickel for the batteries. To be environmentally accountable, the GHG effects of mining that nickel are charged against the vehicle. Fair enough, you think? Not so. The automaker has taken some nickel off the market. By indirect effects, the automaker is now also responsible for the GHG emissions of a hypothetical new mine to make up for the nickel it used. The automaker therefore is “charged” twice, once for the nickel it uses in the batteries, and again for the replacement nickel someone else will use.
Take another marketplace example. Battery-operated vehicle use rises, and therefore electricity consumption rises. Although renewable electricity sources exist, the electricity “lost” for other uses by increased transportation demand must be replaced. Indirect effects analysis concludes that a new coal-burning power plant will supply the lost electricity, with a huge resulting GHG release. The battery-operated vehicle is therefore charged twice for GHG emissions, once for the electricity it actually uses, and again for the new electricity that someone else will use.
Finally, let’s look at a policy example. Congress decides to protect environmentally sensitive lands currently in crop production by offering financial incentives to farmers not to farm these lands. Environmentalists and farmers rejoice. Everyone is happy, right? Not so fast. By removing these lands from crop production, Congress has “caused” the world agricultural system to replace the lost crops. Replacing these lost crops results in large GHG releases, just like biofuel production supposedly did.
This is the logic of indirect effects analysis. The polluter does not pay. Those who actually create the additional pollution are not held accountable for their actions. Someone else is left to foot the carbon bill—twice. Talk about shoddy bookkeeping.
Bruce E. Dale, Ph. D.
Distinguished University Professor
Dept. of Chemical Engineering & Materials Science
Rm. 3247 Engineering Building
Michigan State University
East Lansing, MI 48824
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