International Environment Reporter™ helps you understand environmental laws, regulations, policies and trends in major industrialized and developing nations, as well as in international governmental...
PARIS—Governments of the world's biggest economies should drop their national subsidies and other policies supporting production or consumption of first-generation biofuels because these contribute to food price hikes while not achieving stated environmental goals, according to a report released June 10 by the Organization for Economic Cooperation and Development, the World Bank, and eight other international organizations.
The groups produced the report, Price Volatility in Food and Agricultural Markets: Policy Responses, at the request of the Group of 20 countries, which account for some 85 percent of global economic output.
G-20 agriculture ministers are scheduled to meet June 22-23 in Paris to consider policy responses to commodity price volatility, including for food crops, which France has made a priority of its 2011 presidency of the group.
The report said: “Subsidies to first-generation biofuel production lower biofuel production costs and, therefore, increase the dependence of crop prices on the price of oil. Such policies warrant reconsideration.”
Furthermore, “trade restrictions by favoring domestic sources of raw material for biofuels do not maximize expected environmental benefits,” in particular, reduction of carbon dioxide emissions, it said. The report made several recommendations for agricultural, environmental, and trade policy changes.
The report said that between 2000 and 2009, global output of bioethanol quadrupled and production of biodiesel increased tenfold, pushed by government support policies in wealthy countries.
First-generation biofuels are produced mainly from food crops. The report said that from 2007 to 2009, these biofuels accounted for 20 percent of sugar cane use, 9 percent of use for both oilseeds and coarse grains, and 4 percent for sugar beet use.
“With such weights of biofuels in the supply-demand balance for the products concerned, it is not surprising that world market prices of these products, and their substitutes, are substantially higher than they would be if no biofuels were produced,” the report said.
In addition to ending subsidies, the report recommended speeding scientific research on so-called second-generation feedstock as well as other ways to reduce carbon dioxide emissions and improve energy and food sustainability and security. Second-generation biofuels are mainly produced from nonfood, cellulosic sources and provide greater greenhouse gas savings than standard fuels and most first-generation biofuels.
The report also recommended opening international markets so that renewable fuels and feedstocks can be produced where it is economically, environmentally, and socially feasible to do so and can be traded more freely.
Other organizations involved in the report included the World Food Program and World Trade Organization.
By Rick Mitchell
The report, Price Volatility in Food and Agricultural Markets: Policy Responses, is available at http://www.oecd.org/dataoecd/40/34/48152638.pdf .
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)