Biofuels Production and Policy: Implications for Climate Change, Water Quality, and Agriculture

Assessing the impact of agricultural bio-fuel production policies on the environment

With the global population growing by 90 million a year, the demand for food and energy is set to intensify. Despite our best efforts, agricultural practices are still compromising the natural resource base that we rely upon for food production. As in the past, science and technology offer some solutions to the world’s agricultural problems. But without significant policy changes and initiatives relating to agriculture, new ideas and technology can have only a limited impact.

The future of agricultural policy is complicated by the emerging potential for large-scale bio-energy production. The dependence of the United States on foreign, non-renewable sources of energy has been a topic of heated debate among U.S. policy makers and the general public. One path to energy independence lies in the development of renewable energy technologies and policy, such as those that promote the expansion of bio-fuel production. The growing demand for cleaner burning fuels, such as ethanol, is likely to generate changes in agricultural cropping patterns and land management practices, possibly further threatening our natural resource base.

The link between agriculture and energy production has made the agricultural industry a major player in the adoption and expansion of renewable energy technologies. It is not clear, however, how production decisions and policy developments surrounding the expansion of the ethanol industry will affect the environment, especially water quality and climate change. How policy is formulated will have a significant impact on how bio-fuel production develops. For example, a policy that favors increased production of starch based ethanol from sources such as corn could potentially have a negative impact on water quality. As compared to other crops, corn production has a higher nitrogen fertilization rate and greater nitrogen run-off, which would further compound existing water-related problems such as the hypoxic zone in the Gulf of Mexico. By examining the environmental costs and benefits of bio-fuel technologies we will be better able to understand the impact that renewable bio-energy technology and policy will have on the health of our nation’s water quality and atmosphere. WRI will use this information to educate the public, agricultural community, bio-fuel developers and policy makers in the quest for reliable, renewable and cost-effective sources on energy.

Our final message to these audiences will depend on the finding from our analyses. Ultimately though, policy makers, using our findings, will implement policies that promote the development of agricultural bio-fuels, taking into consideration the broader environmental impacts relating to the production of the various feedstocks. Industry representatives will design and build plants that will process the most “environmentally-friendly” bio-fuel feedstocks, and lastly, the agricultural community will alter their production practices to support these feedstocks.