Innovation / rural finance products and process

Paper

Biofuel and Global Biodiversity

Institute for Agriculture and Trade Policy (2008)

The reduction in global biodiversity has emerged as one of the greatest environmental threats of the 21st century. Urban and agricultural developments have traditionally been primary drivers of encroachment on important, biodiversity-sustaining ecosystems. But a new agricultural trend, the use of plant biomass to provide liquid fuels, is exacerbating agriculture’s impact on biodiversity. These fuels, called biofuels, are changing land-use patterns in many regions around the world, including some of the most diverse and sensitive regions on the planet. This new industry has expanded due to two complementary drivers: the increase in crude oil prices, and national policies and incentives directed toward the production and use of biofuel. The U.S. has established federal subsidies and tax advantages for biofuel production, plant construction and the acceleration of research. Many U.S. states have provided additional incentives. Renewable fuels standards, which mandate particular volumes of renewable fuel consumption by certain dates, have also been key to the industry’s growth in the U.S. and Brazil. The European Union and other countries that have limited ability to grow biofuel feedstocks themselves have followed suit. The result has been an accelerated expansion of the biofuel industry, with many implications for biodiversity that are unclear.

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