14/12/2007 (The Jakarta Post) - Many countries at this year’s climate change conference – including China, the European Union countries, and the U.S. – have set targets for the use of biofuels to reduce their greenhouse gas emissions.

Biofuels are liquid fuels made from animal or plant matter. Burning them to power vehicles can result in fewer emissions per unit of energy than using petroleum fuels. Their production may also promote rural development and national energy security.

Biofuels may not in fact be a sustainable solution to climate change. Depending on the plants used to make the fuel, the production process, and the policy frameworks of governments, biofuels may lead to rising food prices, soil degradation, loss of biodiversity, increased rural poverty, and greater GHG emissions due to deforestation.

The U.S. is the world’s second largest producer of biofuels, and this is mostly ethanol made from corn. The enthusiasm of the Government for corn ethanol arguably has little to do with its environmental benefits, and much more to do with reducing dependence on oil imports, and reducing government subsidies paid to corn farmers.

An increase in demand for corn because of new domestic targets for ethanol has driven up the price and in turn leads to the government saving some US$6billion in subsidies to corn farmers.

These economic benefits of corn ethanol to the United States economy are what drive its growth.  But it has negative consequences elsewhere. As demand for corn as a fuel rises, so too does its price. In late 2006 prices of corn jumped by 65 percent, effecting both global corn prices and the price of other foods such as soy beans which are used to substitute for corn in animal feed. These shifts in production, demand and price for U.S. corn have significant implications for food security in food importing countries.

These impacts on food prices need to be set against the modest reductions in GHG emissions from corn ethanol. At present ethanol can only be mixed with gasoline in quantities of up to 10 percent (described as E10) without engine modification. Given ethanol provides less power to an engine than gasoline, more fuel is required to travel the same distance. Therefore studies indicate using E10 may actually result in a net increase in emissions.

The development of palm oil biodiesel in Indonesia provides another example where biofuels may have significant negative impacts. The aggregate economic benefits of palm oil biodiesel seem good. The Government aims to create millions of jobs and $1.3 billion worth of exports by 2010 through new palm oil plantations and value-added exports. Recent regional development plans have designated 20 million hectares for oil palm plantations, mainly in Sumatra, Kalimantan, Sulawesi and West Papua.

The areas suitable for oil palm cultivation in Indonesia overlap significantly with the areas of lowland tropical rainforest, which are home to more than 6 percent of the world’s plant species, 6 percent of mammal species, 7 percent of reptile and amphibian species, 10 percent of bird species, and 15 percent of the world’s fish species. An expansion of plantations into these areas would mean the loss of large amounts of biodiversity.

Clearing rainforests that grow in peat spoils for new palm oil plantations would also mean a huge release of emissions. These emissions would be many times larger than those saved by the burning of biodiesel instead of conventional diesel. Already a quarter of the plantations in Indonesia are on peat soils, and most of the new expansion is likely to be in these areas.

The establishment of palm oil plantations in Indonesia has also often involved the forced displacement of communities, and this can result in violent conflict, assault, torture, murder, and the destruction of property.

The growth in employment from new plantations may not mean an improvement in livelihoods as local people have little choice but to become palm oil labourers when the forests surrounding their village are occupied by plantations.

The increasing international demand for palm oil as a fuel and as a substitute for corn as an animal feed has meant palm oil producers in Indonesia can earn more from exports than from domestic sales. For this reason local palm oil prices have increased by a third in recent times.

These examples illustrate that many biofuels may be good for business, but are not a sustainable solution to greenhouse gas emissions from the transport sector. They result in an increase in greenhouse gas emissions and an increase in poverty and food insecurity in many parts of the world.

There are many more efficient and effective means for reducing emissions from transport that do not present significant risks to people and the environment. Alternatives include reducing the weight of vehicles and the size of engines, increasing the efficiency and fuel economy of vehicles, increasing fuel prices, improved urban planning to encourage walking, cycling, and the use of public transport.

Josie Lee and Jon Barnett, Jakarta. Josie Lee and Jon Barnett are environmental professors at Melbourne University.