08 October 2009

Biofuels and Developing Countries

This [unedited] guest post is by a student in my EEP100 class (background post).
Please praise/critique/comment on its economic quality and importance to you.

Kin Tat Lay says:

Today many countries have been adopting biofuels technology. Many articles suggest investors to expand the biofuels business of agrofuels, ethanol, and biodiesel by demonstrating that it can diminish our oil imports and create more local jobs for community. Moreover, it presents biofuels as an environmental-friendly fuel in which it is less of a hazard if it spill because it is rapidly biodegradable in water and less carbon dioxide emissions as compared with gasoline. Ethanol and biodiesel can also generate energy from food waste. On the other hand, some of the risks with biofuels included soil changes with CO2 erosion (lead to land degradation), nutrient extraction, deforestation, investment on mechanization and labors, herbicide, and water waste. As for agrofuels, it involves with food sovereignty issue because the government will have to transform those lands that are used for agriculture for agrofuels. So when the supply for agrofuels increase, the supply for substitute goods will decrease and these substitute goods are usually referring to agriculture and etc. As a result of decreased supply in agriculture, the food prices will raise and more and more people will struggle for food, especially for poor developing countries. Yet, America companies such as Cargill has been promoting and expanding their biofuels business oversea into developing countries. This could help those developing countries generate more jobs, increase exports, develop advanced technology, and improve the native people lifestyle as long as the lands that they use did not in conflict with other resources that they are developing. Though, some consequences might include job losses for substitute goods and opportunity cost of investment funds for other energies alternative such as hydrogen, wind, solar, and etc. Therefore, we have to weight the pros and cons of biofuels carefully before massive investment in it.

Bottom Line: The expanding business in biofuels worldwide can lead to the rise of crop prices and many other environmental, economical, and social issues even if they can be beneficial.

2 comments:

Eric said...

I gets more complicated than this. Levelized Cost of Energy is a good way to compare the fuels throughout the process. For instance, you need to consider the cost in fossil fuels needed to create the fertilizer that you need for the biofuels.

Kin Tat Lay said...

Thanks for the comment!