Bio-fuels and Natural Capital Depletion

Many Latin American countries have well established bio-fuel industries for the past thirty years. They have been using first generation bio-fuel crops such as Soybeans and Palm Oil. Soybeans are dominant bio-fuel crop produced in these countries. The large-scale Soya production has lead to deforestation in countries such as Brazil, in Paraguay, Bolivia and Argentina (Biofuelwatch, 2007). This rings through especially for Argentina, where Soybeans are their most exported product and the most planted crop. Spurred on by the increased demand, the Argentine government has issued a new policy where growers of bio-fuels will receive tax incentives (Valente, 2006).

New studies by NASA have found a direct correlation between the rate in the depletion of the Amazon rain forest and the increasing the world market price of Soya. This is predominately caused by increased demand of bio-fuels (Morton, et al., 2006). Continued deforestation, through continued crop over cultivation will ultimately lead to desertification.

A recently completed Comprehensive Assessment of Water Management in Agriculture estimates that 1.2 billion people live in areas affected by water scarcity, where water resources are not enough to meet growing needs (Human Development Report, 2006). The increased pressure on crop production will put pressure on water reserves. In India almost all its sugar cane crop used for bio-ethanol production is irrigated. Irrigation of Bio-crops threatens water resources in arid counties, which is confounded by that in India; a litre of sugarcane ethanol requires 3500 litres of irrigation water (Fraiture, 2007).

The environmental impacts using first generation bio-fuels are evident in Argentina. Argentina’s well established bio-fuel industry could be used as a model for how bio-fuels would progress globally using first generation bio-fuels.  Brazilian president, Luiz Inacio Lula Da Silva has supported Africa’s efforts in creating a bio-fuel industry. He has called upon Africa “to join a bio-fuels revolution”. If Africa was to use the South American model utilising first generation bio-fuel crops, it could suffer the same environmental impacts, if not worse. It could lead to increased desertification and water shortages throughout Africa. Ultimately the utilisation of first generation bio-fuels is unsustainable.

Biofuelwatch. (2007, April). Argentinean Soy Biofuels for the UK Fishing Fleet?

Valente, M. (2006, April 20). Argentina Biofuel Project comes with Heavy Environmental Costs. Buenos Aires, Argentina.

Morton, D. C., DeFries, R. S., Shimabukuro, Y. E., Anderson, L. O., Arai, E., del Bon Espirito-Santo, F., et al. (2006). Cropland expansion changes deforestation dynamics in the southern Brazilian Amazon. (R. Schekman, Ed.) Proceedings of the National Academy of Sciences of the United States of America , 103 (39), 14637-14641.

Fraiture, C. d. (2007, May 10). Biofuel crops could drain developing world dry. Retrieved March 25, 2008 from Science and Development Network: http://www.scidev.net/en/opinions/biofuel-crops-could-drain-developing-world-dry.html

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Completing a masters in Strategic Management and Planning

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One comment on “Bio-fuels and Natural Capital Depletion
  1. jeremy says:

    The production of second generation biofuels from waste agricultural and forest biomass seems like a no-brainer as it would satisfy a number of objectives, not least of which would be enhanced ecosystem efficiency.

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