IATP paper probes deeper implications of ILUC debate

By Susanne Retka Schill | February 02, 2012

Looking for a middle ground where environmentalists and ethanol advocates could meet, the Minneapolis-based Institute for Agriculture and Trade Policy released a paper by Julia Olmstead reflecting on the lessons learned regarding the debate over indirect land use change (ILUC). Nearly a year ago, IATP invited a group comprised of corn farmers, environmental policy advo­cates, ethanol producers and researchers to Brazil to investigate firsthand the changes in Brazilian land use and the relationship to U.S. ethanol production, followed by a one-day conference.

One of the points made in the six-page paper emerging from those efforts is that although those in support of the ILUC factor have argued higher demand for corn for ethanol production stimulates land conversion, it may be based on a faulty assumption. “Although the connection between price signals and reduced land conversion isn’t often part of the ILUC conversation, the implicit assumption is that low prices will help stem land conversion,” the paper states. “High prices stimulate agricultural expansion, but there is evidence that low commodity prices can do the same. Low prices can encourage producers to plant more to make up for lost volume, and have led many developing nations to decrease investments in agriculture that could lead to sustainability and food sovereignty improvements. Low prices have instead encouraged many countries to create food systems based on cheap imports.”

The paper broadens the discussion from concerns regarding land use change to the larger role agriculture plays, the impact of market structures and the global concerns regarding deforestation and climate change. It suggests a second look at some old policies, such as reviving a grain reserve program, and the need for a different approach to incent more sustainable bioenergy production “through mechanisms tied to a holistic measure of overall ‘performance,’ rather than volume mandates.” 

Olmsted’s report also makes the case that environmentalists and biofuel producers can find more middle ground where they can work together. “Despite the antipathy the ILUC debate has generated between U.S. biofuel producers and environmentalists, it doesn’t take much probing (much less a trip to Brazil) to realize that both groups share a certain set of goals. Both would like to see reduced reliance on petro­leum, both would like to see the growth of renewable energy use and production, and both would like to ensure that agri­culture can meet all our needs over the long term. These goals will only be real­ized through collaboration.”