Marcelo Paiva & Tsegay Wolde-Georgis, University of Colorado’s Consortium for Capacity Building. 8 March 2010
Brazil is considered a global leader in sugarcane-based ethanol biofuel production & technology. It made strategic decisions to develop alternative forms of energy for transportation following the crisis and oil embargo in the early 1970s. In 1979, Brazil had developed the first commercial vehicle powered 100 % by ethanol.
The record oil prices of 2007-08 shocked many leaders around the world. Both fuel and then food prices went through the roof both in developed and developing countries. Many developed countries began to introduce, or accelerate approval of, polices that encouraged the development of biofuels, while Brazil found itself in a very advantageous position to export its technology to other developing countries.
While over the years the price of food has gone up, so has the price of fossil-fuels on which the farmers’ machinery relies to work the land. In addition, there is concern about greenhouse gas emissions from fossil-fuel burning which contributes to the heating of global temperatures and to a constantly changing climate. What’s more, the peak oil clock ticks uninterruptedly so countries cannot expect to rely on non-renewable cheap forms of energy much longer.
The idea that biofuels can rescue us from an irreversible energy crisis is contentious, and the reactions in different parts of the world have been dubious. Some argue that biofuel investment can take away the focus on land for food production, driving food prices up, whereas others argue that marginal lands (read: “unused land”) could be used at a positive net benefit for the environment while boosting infrastructural development in that area. Regions of the world that are perceived as “land rich”, like parts of Africa, became a focus of attention for biofuels investment.
Several countries have been looking to Africa as a new frontier for cost-effective biofuel production, and the issue of peak oil makes energy security a matter of national security for countries like the US, but also for other nations around the world who see fossil-fuel dependence as an obstacle to development. Oil prices, however important, are not the only incentive for biofuel investment; “going green” can also be beneficial for rural community development and revitalization of the rural economy (there are less farmers and more “urban-ers” in the world every year), but also a long-term benefit found in the reliability on renewable-energy. Africa has land and Brazil has the technology and expertise, and the current political administration in Brazil has been championing biofuels diplomacy as an important piece of its foreign policy.
One thing is certain: however stealth to the common energy consumer, the renewable-energy market shift is imminent, and is proving lucrative. As oil giants like Exxon-Mobil and Royal Dutch Shell move to partner with biofuels investors, it highlights new trends in energy development investment in the tropics. Also noteworthy is that Brazil’s biofuel diplomacy is taking place in a very competitive environment: other emerging economies like India and China are pursuing land acquisitions through the purchase and lease of land in Africa to grow biofuels feedstock and for food production geared toward their own domestic consumption. Competitiveness can provide for a very fast-growing market.
In Africa, biofuels could be viewed as the beginning of a brighter future, as a result of investing in renewable energy in countries that have been primarily exporting agricultural products with declining terms of trade. Many African leaders believe that the biofuels revolution will be a new opportunity leading to energy security and revitalization of the agricultural sector in Africa. Most energy sources of rural Africa are currently based on the direct use of biomass such as dung and wood, which are already being used as low-tech biofuel. Liquid biofuels can be a healthy transition into the future if used properly to substitute traditional biomass.
The investment in biofuels also raises questions about the carbon footprint benefit of producing and using biofuels like ethanol from corn or sugarcane, since the overall gain (with current technology and market prices) may be marginal. The diminished carbon footprint, however, is but one argument in favor of biofuel production. As mentioned by Rory Williams in A Definition of Sustainable Mobility, the investment in biofuels provides, in addition to potential for a cleaner environment, the support for other sustainable objectives like improved energy security, through the reduced reliance on fossil fuels, and local job creation.
The South-South partnership such as the one Brazil is pursuing in Africa is a way of maximizing African interests which have historically been exploited by the European neo-colonizers. Like China, Brazil is being utilized by African governments to counter the European infrastructural economic domination.
This increased interest in Africa reveals that it is possible to bring development to Africa and, while biofuels are seen as a profitable activity for investors, it also brings independence from fossil-fuels, economic stability and environmental benefits.
Countries like Angola, Mozambique and Nigeria may well see the biofuels feedstock crops filling their landscapes, but they will hopefully see infrastructural development, employment and technology transfer as well for those working with the biofuels crops in the form of more schools, hospitals, better water treatment facilities and an improved quality of life. For this to ensue in a sustainable way, it is important to pay close attention to the laws and regulations of the African countries.
The current “land grab” competition in Africa is representative of a new trend, but African policy makers must be prepared to cope with unintended consequences of the rush to embrace a new technology. To minimize those adverse side effects, biofuels strategies should incorporate adequate environmental and societal impact assessments. It should also include protection of farmers from being removed from their land (by design or accident) and the protection of ecosystems from a loss of biodiversity in the face of putting land into biofuels production. After all, development also needs to be cultivated with great care in order for it to yield its most positive results.
If one were to ask the same question today, “who will feed China?”, the answer would be quite different. China’s economy has been booming for the past 15 years or so. The government has amassed more than a trillion dollars of US currency as a result of a chronic trade imbalance in its favor and against America. That puts it in a position to purchase food, whenever it needs to. It can buy energy resources, new technologies (such as for in-country water transfer schemes), fertilizers and whatever else it is that might be needed to increase crop yields and overall food production. But, even that might not be enough to feed China. There is a phenomenon that has been quietly taking place under the proverbial radar screen, that is, out of the purview of policy makers in most countries.