Bio fuels are not the Solution

With climate change accepted as a threat by even its strongest sceptics, there is a rush to find quick and dirty answers. One buzz is to substitute fossil fuel with bio-fuels, that is, fuel processed from plants. But unfortunately bio-fuels are fast becoming a good idea, but bad in practice.

We know today that global food prices have risen to an all-time high, already leading to inflation in many countries and even food riots in some. In the last few years, the US alone has diverted about 25% of its maize crop to bio-diesel, and so the price of maize has increased by 60%.

The European Union mandate, to put 6% bio-fuel in the transport sector by 2010, is diverting land from food to fuel and increasing volatility of prices of oilseeds and their substitutes. In part, the price of wheat has increased because it is also used as an animal feed, substituting now-expensive maize. Also, the world is beginning to see the first impact of climate change in the increasingly variable, erratic and unseasonal weather events � tropical cyclones, heavy rains leading to floods, bitter cold spells and frost � which are failing crops and exacerbating the food crisis.

The world needs a policy for bio-fuels. First, it must accept that the �switch� to bio-fuel will do little to avert climate change in the current circumstances. In the US, if the entire corn crop is diverted to ethanol, it would replace only 12% of the petrol used today. And this use is increasing. Instead, global climate policy must be to change consumption patterns to reduce emissions. Governments should not provide subsidies to grow crops for bio-fuel but spend to limit their fuel consumption by reducing the sheer number of vehicles on their roads. Subsidising the bus and not the bio-fuel, will do more for climate mitigation.

Secondly, the policy must be to use non-edible bio-fuels on non-arable land only in high efficiency vehicles of mass transit � buses, not cars. If this is done, bio-fuels, which are renewable and emit less greenhouse gases, will make a difference. Otherwise, we are only fooling ourselves.

Thirdly, bio-fuels could well be a big part of the climate solution but only if they are used to help the world�s poor to leapfrog into a non-fossil based energy future. What we do not realise is that the bulk of what we call renewable energy � as much as 80% � is the biomass energy (chulha) used by the poorest to meet their cooking and fuel needs. Therefore, the opportunity for a massive bio-fuel revolution is not in the rich world�s cities to run vehicles, but in the grid-unconnected world of Indian or African villages.

Instead of bringing fossil fuel long distances to feed this market, this part of the world can leapfrog to a new energy future � from no fuel to the most advanced fuel in the world. The bio-fuel can come from non-edible tree crops � jatropha in India, for example � grown on wasteland, which will also provide employment to people.

This fuel market will demand a different business model. It cannot be conducted along the current so-called free market model, which is based on economies of scale and, therefore, demands consolidation and leads to uncompetitive practices. In today�s business model, the company will grow the crops, extract the oil, transport it first to refineries and then back to consumers. The new generation bio-fuel business needs a model of distributed growth in which we have millions of fuel growers and millions of distributors and millions of users.

For this to happen, we will have to remember that climate change is not a technological fix but a political challenge. Bio-fuel is one part of that new future but only if we can get politics right.

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