Academic journal article Agricultural and Resource Economics Review

The Optimality of Using Marginal Land for Bioenergy Crops: Tradeoffs between Food, Fuel, and Environmental Services

Academic journal article Agricultural and Resource Economics Review

The Optimality of Using Marginal Land for Bioenergy Crops: Tradeoffs between Food, Fuel, and Environmental Services

Article excerpt

A vigorous debate has emerged over the past decade concerning use of the world's land resources as concern about feeding growing populations, particularly in the developing world, has become prominent in public discourse (Ray et al. 2013, Godfray et al. 2010). In addition, ethanol production has increased dramatically in many countries during the same period, creating added demand for agricultural land (Harvey and Pilgrim 2011). This increased use of ethanol has come about in part due to public policies that subsidized the growth of the industry. These policies were motivated by several objectives, one of which was to spur development of second-generation feedstocks (such as ones produced from perennial grasses), which are expected to generate substantial benefits in terms of reduction of greenhouse gas (GHG) emissions. The second-generation feedstocks may also generate water quality benefits and provide habitat for plants and animals in highly agricultural regions of the United States.

During the mid to late 2000s, grain prices spiked in much of the developing world, contributing to food instability and hunger (Guariso, Squicciarini, and Swinnen 2014, Wright 2011), and policies that promoted ethanol production in the developed world were identified as a possible culprit for those spikes (Tokgoz et al. 2008, Hausman 2012, Tadasse et al. 2014). However, crop failures due to drought, combined with trade restrictions imposed by economically stressed countries, have been identified as primary sources as well (Anderson and Nelgen 2012). Despite recognition that the cause of the price spikes was multifaceted, the concern about competition between food and fuel production on agricultural lands has become something of a black eye for any form of ethanol production with some arguing that biofuel crops, which inherently compete for land with traditional food and fiber crops, should not be subsidized or grown at all.

As previously noted, one of the original goals of biofuel policies was to support a path to less-carbon-intensive fuels. While ethanol from corn grain appears to have, at best, moderate GHG-reducing characteristics (Morales et al. 2015), the original biofuel mandates in the United States and affiliated legislation were also designed to speed the process of developing and implementing second-generation biofuels produced from perennial crops such as switchgrass and miscanthus. The technology for converting those crops to fuel is not yet mature; if it does develop to the point of commercialization, significant GHG reductions are possible (Limayem and Ricke 2012). Furthermore, an attractive co-benefit of planting perennials across the landscape is that these plants simultaneously retain nutrients (nitrogen and phosphorus) and reduce soil erosion and thus would likely achieve significant improvements in water quality in many degraded lakes and streams and increase the level of carbon sequestered in the soil.

Given the potential environmental benefits associated with ethanol, particularly second-generation biofuels, some have argued that biofuels should be developed, but their production should be restricted to planting on "marginal" land to avoid competing with food crops (Gelfand 2013, Shortall 2013). Interestingly, there is no agreed-on definition of marginal land, and, in general, the term has been used to define two broad types of land.1 In one case, marginal land has been used to refer to land that has low productivity in terms of yield. In other cases, marginal land is land that is considered environmentally sensitive-locations with high erosion rates or proximity to streams and rivers are typical examples. While there may be cases of overlap between these two definitions, there is no guarantee that will be the case. Indeed, a number of studies have been completed to identify sources of marginal land based on competing definitions (Lewis and Kelly 2014, Shortall 2013).

The purpose of restricting biofuel crops to marginal land is to minimize competition between food prices and ethanol/energy prices, thereby protecting the food supply and preventing price spikes such as those seen in the mid to late 2000s, and to harness the benefits of biofuels to mitigate global climate change and improve water quality (as well as other ecosystem benefits affiliated with perennial crops). …

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