A Green Economy follows an economic model in which business and infrastructure are reconfigured to deliver better returns on natural, human and economic capital. 1
Actions that can contribute to this include introducing measures for reducing greenhouse gas emissions, more efficient and thoughtful use of natural resources, and reduced social disparities. Ideally, a green economy is one in which economic growth is decoupled from environmental impacts and or resource use, including the consumption of land, material and energy resources.
To date, energy use and economic growth have been closely linked. As Figure 2.1 shows, there is a linear relationship between energy consumption and wealth as measured in the Gross Domestic Product (GDP) of nations.
In building a green economy, the energy sector has a different part to play by replacing fossil fuel with low- carbon options. It may also contribute to implementing a green-economy strategy incorporating greater energy-efficiency and renewable energy sources. These are key approaches in supporting growth in GDP, whilst avoiding a continuation of the linear relation to energy demand. Biofuels are among the potential low-carbon options. And they provide, particularly in many developing countries, scope for harnessing biomass resources and the agricultural sector to develop indigenous industries.
Figure 2.1 - Wealth of nations and energy consumption
If properly planned and managed, biofuels can contribute to a number of policy objectives which support the development of the green economy, including:
• Diversity and security of energy supplies.
• Many nations have the ability to produce their own biofuels from agriculture, forestry and urban wastes. Produced locally, bioenergy can reduce the need for imported fossil fuels – often a serious drain on a developing country’s finances. By diversifying energy sources, biofuels can also increase a country or region’s energy security.
• Rural development. With 75 percent of the world’s poor depending on agriculture for their livelihoods, producing biofuels locally can harness the growth of the agricultural sector for broader rural development.
• Because agriculture is labour-intensive, job opportunities can be found throughout the biofuel value chain, particularly where conversion from feedstock to biofuel occurs close to where the feedstock is produced. The additional income from new jobs is likely to have a multiplier effect when spent locally, which can further encourage development. Higher quality energy from biofuels can reduce the time needed to collect water and firewood, which means that many women and children have more time for study and other productive tasks.
• Job growth and creation is a primer for the green economy where each renewable energy technology needs different labour and skills. Jobs in the bioenergy sector are projected to make the greatest contribution to employment compared to all the other renewable energy sectors. However, the factors that increase or decrease this potential include the level of mechanisation, agricultural business models, and available human capacity.
• Energy Access Currently more than 1.5 billion people have no access to electricity and up to 1 billion more have access only to unreliable power supply. And according to estimates by the IEA, 2.5 to 3 billion people rely on biomass and transitional fuels for cooking and heating. Biofuels can help provide access to energy for energy-deprived and off-grid communities, thereby contributing to the goal of universal access to modern energy services by 2030 and spurring greater economic development.
• Health benefits When biofuels replace the traditional inefficient combustion of biomass, indoor pollution is reduced along with subsequent health impacts.
• Reduced greenhouse gas emissions Biofuels that replace fossil fuels or traditional use of biomass for energy can reduce GHG emissions. However, the potential to live up to this promise depends on the GHG balance during production and conversion of biofuels. For example, in many developed countries liquid biofuels for transport have been identified as one of several measures to achieve emission-reduction targets under climate change commitments.
Figure 2.2 - Green jobs
Bioenergy in all its forms has been, and will continue to be, a part of the energy mix. Biofuels, as one form of bioenergy, can be an important component in the effort to replace fossil fuels with renewable energy, as well as being a factor in achieving the 2°C climate goals. The actual energy mix and potential for sustainable biofuels development, however, depends on individual countries’ conditions and needs.
Most of the potential for growth in biomass production is in developing countries, particularly in tropical regions where the conditions are most favourable for producing feedstocks. In these regions developing countries have a significant opportunity to create both a domestic industry and engage in international trade.
Studies indicate that global bioenergy use is approximately 10 percent of the global energy mix, with a growth rate of 1.3 percent per year. Future projections for the supply of bioenergy are shown in the 2.3 figure. The analysis is based on four scenarios for environmental targets, based on technical potentials that differ depending on agricultural efficiency, production systems, water supplies.
The scenarios span a wide range of global bioenergy potentials, and experts argue that the high-end projections play down technical constraints such as available land or realistic yields. It seems the potential of bioenergy crops is at the lower end of the range and is associated with integrated optimisation. Researchers say that future capacities of bioenergy, and biofuels in particular, lie in residues from agriculture and forestry.
Figure 2.3 - World bioenergy technical potential in 2050
Figure 2.4 - Global production of biofuels
Liquid biofuels provided 2.7 percent of all global road transport fuels in 2009. The snapshot of biofuel production in Figure 2.5 shows global ethanol production currently concentrated in two countries. The snapshot for biodiesel production in Figure 2.6. shows a similar but slightly more diversified picture.
Figure 2.5 - Global ethanol production, 2009
Figure 2.6 - Global biodiesel production, 2009
Production trends indicate that the supply of both ethanol and biodiesel is steadily increasing, although the global ethanol market is more than four times larger than the global biodiesel market. Markets for both are increasing, not only in established, traditional markets such as the European Union, Brazil and the United States, but also in countries such as China, India and Argentina.
The latter countries are beginning to see the economic potential of the biofuel sector, and its prospective role in a green economy. Although markets are increasing, the global bioenergy potential is largely underused, particularly in some regions where there is significant potential for efficiency gains in both agricultural production and conversion to biofuels.
Figure 2.7 - World biofuels production trends
Box 2.1 Brazil: empowering an industry sector
Brazil has gradually developed and established an ethanol industry and growing biodiesel sector, offering an example of how countries can develop ‘home-grown’ renewable energy sectors. This development has been facilitated by long-term policies to address the entire supply chain, including the introduction of ‘flex-fuel’ vehicles which run on any blend of petrol and ethanol.
Social and environmental safeguards were developed to address concerns as they arose. The Social Fuel Seal, for example, encourages the economic integration of rural farmers into the biofuel sector, while land zoning provides a methodology for identifying suitable land areas for biofuel production without encroaching on land with high biodiversity. Efficiency improvements and integrated food energy systems (IFES) with sugarcane bagasse have also increased the productivity and efficiency of biofuels in Brazil. Finally, bagasse is increasingly used not only to supply the process energy for ethanol production plants, but also to supply electricity to communities near the plants.
Source: IEA (2010). Sustainable Production of Second Generation Biofuels www. iea.org/papers/2010/second_generation_biofuels.pdf. Le Monde Diplomatique (April, 2009) Brazil: who gets the cake?. Reuters (2009) Brazil Must Save Forests in Ethanol Push: Clinton http://www.reuters.com/article/idUSTRE55123020090602
Figure 2.8 - Key factors of the Brazilian biofuel sector
Figure 2.9 - Brazilian biofuels: infrastructure and crops
1. The UNEP Green Economy Report released in February 2011, outlines the public policy options, urgent actions and investments needed to a global ‘Green Economy’ – one that is low-carbon, resource-efficient and socially inclusive.