Seeking Common Ground

Traveling together to Brazil, Americans representing a range of perspectives on ethanol and environmentalism attempt to forge a shared path toward ethanol sustainability
By Julia Olmstead | July 20, 2011

For 10 days in March, a group of farmers, ethanol producers, environmental advocates and university professors traveled with staff from the Institute for Agriculture and Trade Policy to Brazil to learn about the effects of U.S. biofuels policy on Brazilian agriculture. The divisiveness of the indirect land use change (ILUC) debate—the theory that corn ethanol production in the U.S. leads to deforestation in countries like Brazil—has accelerated an already widening divide between many environmental groups and biofuel proponents. But IATP believes that the two sides of the debate have similar goals regarding the sustainability of biofuels, goals that can only be recognized and jointly acted upon through dialogue. To that end, the Minneapolis-based IATP invited open-minded participants with diverse opinions on the politics around ILUC to join a tour of Brazil.

The results of the trip were rich. As we traveled from the sprawling metropolis of Rio de Janiero to the small town of Lucas do Rio Verde, Mato Grosso, in the heart of Brazil’s Cerrado—a grassland ecosystem where most of that country’s soybeans are grown, participants learned as much about each other as they did Brazilian agriculture. During six-hour bus rides through the Brazilian countryside, over tropical juices alongside Rio’s Copacabana beach, or while swatting mosquitoes in the Pantanal—the world’s largest wetland—group members dug into the issues surrounding ethanol’s real or perceived impacts on land use in Brazil and elsewhere. And while the discussions were always civil— “Minnesota nice” ruled the day—the group never shied away from asking tough questions of each other. 

Following are excerpts from interviews with three trip participants: Nathanael Greene, director of renewable energy policy at the Natural Resources Defense Council; Bill Lee, CEO of Frontline Bioenergy; and Joe Ludowese, Minnesota farmer and board member of Heartland Corn Products Ethanol Cooperative in Winthrop, Minn.

Environmentalist View

Nathanael Greene, what was your opinion about ILUC before the trip, and did it change at all from what you saw there?

A: I don’t think it changed in any big sweeping way. Folks who don’t like the concept tell me ILUC isn’t going to stop deforestation. They say: “If you like the forest, work to protect it head-on.” Well, the pressure is on the Amazon and the Cerrado to be cleared and developed. I got a more profound sense of how strong those pressures are. There is no doubt in my mind that biofuels policy alone is not going to save the Cerrado—even if it’s done perfectly. So there is something to that argument. On the other hand —ILUC is not about saving the Cerrado, it’s about developing biofuels without exacerbating the challenges to the Cerrado.

What surprised you most from the trip?

A: I knew Brazil was an agriculture powerhouse, but I assumed it would be more unique, more obviously Brazilian in its approach to agriculture. It looks like commodity production here in the U.S., or like what I’ve seen in Europe. There were differences, but they were more about scale, less about equipment, or economics, or people.
What lessons could U.S. ethanol producers learn from Brazil?

A: We learned an interesting lesson in marketing from the sugar cane industry. I don’t think we really learned or saw enough to validate their claims of dramatically improved sustainability. But they spent a lot of time talking about it—accepting and embracing major policy changes, zoning, the whole concept of ILUC. I’m not sure they love [ILUC], but they have modelers working on it and they don’t dispute the basic concept of it. The U.S. corn ethanol industry is losing the marketing challenge by not embracing the steps it could take to reduce their environmental impacts, things like shifting to biomass for process energy, shifting to cover crops and other steps.

Is there a path forward on indirect land use change that would satisfy ethanol producers and environmentalists?

A: What seemed more important to me after talking to corn farmers and other trip members is the urgency of having working models of biofuels that avoid ILUC. Not in theory on paper, but out in the world. Until we have those models, and there are people getting rich on those models, I think it’s going to be hard to forge agreement on ILUC in a broad way. The path forward is via the economic development of low-ILUC feedstocks and technologies. There will continue to be a debate and science will continue to drive the policy, but there won’t be broad consensus. Policies will reward me more if I go that way. I heard loud and clear that the farmers think of this as a penalty and don’t see any way they can avoid it, and it doesn’t feel fair to them. I get that, but if we want to do biofuels we have to figure out how to avoid this. The way is to commercialize those models that can avoid putting more pressure on land.

Producer View

Bill Lee, Brazilian agriculture and ethanol production are portrayed in the U.S. as threats to U.S. agriculture—from what you saw in Brazil, do you think that’s true?

A: We were in Mato Grosso and clearly they have a lot of acres and they want to grow more crops on those acres. When they complete the railroad, they will be the dominant soybean producer in world. Is that a threat? Not necessarily. We still have infrastructure advantages, and there will be a growing market for commodities regardless. In terms of cane ethanol—the competition between cane ethanol and U.S. biofuels is potentially very healthy and mutually supportive. It supports the notion that biofuels are important and have the potential to displace fossil fuels.

What could Brazilian producers learn from the U.S.?

A: They need to concentrate on improving sugar yield per acre. In lots of ways the U.S. is doing a better job on land use than Brazil, but that’s not the perception. UNICA [the Brazilian sugarcane association] producers are somewhat disjointed and technically unsophisticated. U.S. corn ethanol production, by comparison, is probably better managed, more technically adept, but the perception is that Brazil is more “advanced.” I’m going to lay a lot of the blame for that at the feet of the NCGA [National Corn Growers Association] and its lack of willingness to engage with environmental communities. They say, “I don’t even want to dignify your position by asking you to look at me in a positive light.” Corn ethanol and the NCGA are so married, that corn ethanol’s bad rap is inherited. But I put this on Daddy Corn.

Why do you think biofuels are such a focus for the environmental movement?

A: This was the subject of many discussions during the trip. Historically, the environmentalists have fought the fossil fuel industry, a very powerful foe that’s been around a long time and is entrenched in our lives—it’s a tough battle. But then here comes a new kid on the block, one that’s highly dependent on public policy and is a lot easier to fight than oil companies. And if someone like [Princeton researcher] Searchinger convinces you biofuels are worse than petroleum, you have all the moral reasoning you need to go after them. But if you peel back the assumptions, and see that biofuels are really better than fossil fuels, you think—are they crazy? Shouldn’t they be advocating for the best environmental outcomes? The ILUC debate is an opportunity for the environmental community to kick the new kids in the shins and take away their money, all for the wrong reasons.

Is there a path forward on indirect land use change that would satisfy ethanol producers and environmentalists?

A: Each side has a range of perspectives. People on the extremes will never be satisfied with a compromised solution. But for the rest of us, pick ILUC values that nobody likes and agree on them, numbers the ethanol guys think are too high, and the environmentalists think are too low. I think it’s an illusion to think you can get a working model that has a high level of complexity. By taking this approach—the compromise— you are reflecting that this is a real issue and that you have accounted for it. I think reps from both sides have to say—this is important, this is real, then decide on some numbers and move on.

Farmer View

Joe Ludowese, what was the most interesting thing you learned?

A: You always hear that Brazil really struggles with infrastructure, and it’s true. In Mato Grosso they  have neither  a vast rural infrastructure nor a rural railroad system to support agriculture.  Until you actually see that, it’s really kind of hard to comprehend. It was fascinating to see the volume of trucks on the road as it is the only means of getting  agricultural products to and from the export locations.  They really have a primitive infrastructure for the volume that they’re doing. In the cities there was infrastructure everywhere, but in rural areas it is very limited.

Were there any big differences in land use issues between Brazil and the U.S.?

A: [Brazilian farmers’] ability to  double crop corn and soybeans  is amazing. In the part of Mato Grosso we visited, they’re not exporting any corn, it’s all being used in the area to feed livestock. If they get transportation infrastructure into that part of the country, who knows where they’ll go?  My understanding is that there is  more groundwater in Mato Grosso than in any place in the U.S., so their ability to irrigate crops in the dry season  and increase yield  seems untapped.

What lessons could U.S. ethanol producers learn from Brazil?

A: To be more approachable and to do a better job presenting and promoting the industry. That’s been a huge failure on the part of the U.S.  ethanol industry.   The reality is that the ethanol industry is very “young” and has had a lot of growing pains just as every other industry has over the course of history. We have a story to tell about progress and evolution,  and at some point the industry needs to grow up and promote itself.

Is there a path forward on indirect land use change that would satisfy ethanol producers and environmentalists?

A: Environmentalists need to have a broader view of how one thing impacts another. I think ILUC has such a narrow focus and is an inexact science because of all of the variables, some of which are subjective.  I don’t know how you get to a compromise between people who believe in  ILUC models and those who don’t.  I’m somewhere in between, but I don’t think  ILUC models are ready to be used for policy. If there is some kind of a compromise, that same formula needs to be applied to all other energy sources. Everything has to be painted with the same brush, not just U.S.  biofuels.
Author: Julia Olmstead
Senior Associate, Rural Communities Program
Institute for Agriculture and Trade Policy
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