Why ILUC Theory Bears No Resemblance to Reality

Biofuels & Climate Change

Iowa State’s Bruce Babcock has written a defense of the current economic equilibrium models used by the EPA and California Air Resources Board, in light of the fact that the models’ assumptions about soybean production and acreage have turned out wrong. Babcock frames the debate over international land use change as “whether the models used by CARB and EPA are accurate enough to support regulations.” There is, however, a larger question over whether the models are the appropriate ones to use in the first place.

Economic equilibrium models by definition measure the demand for biofuel feedstocks as a shock to the worldwide agricultural system. As Babcock explains, economists estimate a baseline measure of the agricultural system “under a set of assumptions about future macroeconomic growth, growing conditions, crop yields, exchange rates, and government policies,” and then rerun their model with a higher amount of biofuel production while holding all other factors constant. The difference in model outcomes is intended to isolate the effect of biofuels on the system.

It has been noted that the outcomes are highly sensitive to the assumptions for the factors that are held constant. For instance, authors at Iowa State have explored the sensitivity of the model to the variable of crop yield. But the underlying problem with the model is that it presents the worldwide agricultural system with only one possible reaction to the “shock” of U.S. biofuels — land use change. And it does so by assuming that worldwide land use is at a point of equilibrium. “Expansion of U.S. biofuels will result in more land being devoted to crop production on an aggregate worldwide basis,” Babcock writes.

Worldwide agricultural land use is shifting and has shifted over time as other countries compete with the U.S. for agricultural markets. The USDA Economic Research Service’s “Agricultural Projections to 2018″ shows that U.S. agricultural land devoted to the eight major crops has shrunk since 1980, but is expected to remain stable through the next decade due in part to biofuels. While this model and its outcomes are also based on and sensitive to assumptions, they are designed to measure the interplay of worldwide economic growth, population growth, the value of the U.S. dollar, and oil prices in addition to U.S. agricultural policies and biofuels.

Babcock notes that the variables plugged into the models being used by EPA and CARB “are ripe ground for aggrieved parties.” It should also be noted that the choice of models by EPA and CARB were also political decisions influenced by the input of environmental and other interests. The fact that these models are used by EPA and CARB only to measure the effects of biofuels, while different models are used for petroleum, is likewise a political decision. Perhaps certain parties would not be so aggrieved if the outcome of the “analyses” by EPA and CARB had not been predetermined in such a way.

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One Response to Why ILUC Theory Bears No Resemblance to Reality

  1. Aureon Kwolek says:

    indirect land use change theory – junk science

    The Renewable Fuels Association (RFA) says its experts are “unable to confirm and replicate” EPA science on indirect land use change theory. That’s because it can’t be scientifically proven and probably never will be. Upon request by the RFA, for the Food and Agriculture Policy Research Institute’s (FAPRI) model, the EPA was unable to release the actual model. That ought to tell you something. They don’t have one. The “peer review” itself could not agree on preliminary modeling. Even if there was a working model, if you put false assumptions in, you’re gong to get false conclusions out. Yet the EPA is trying to force indirect land use change theory into their regulations, while it remains unproven and highly controversial.

    Followers of indirect land use change theory claim that an acre of biofuel displaces an acre of food, which must then be grown somewhere else, on deforested land – FALSE. Our corn crop is the same number of acres planted this year that was in cultivation 60 years ago. Since then, the yield per acre keeps going up, so we are not displacing other crops to grow more corn. Technology is getting much more out of the same acreage.

    What biofuel critics omit, is that 87% of our corn crop is feed corn, unsuitable for human consumption. We only use 25% of our feed corn to make ethanol. That same portion of the crop used for biofuel also produces food. A 150 bushel acre of corn ethanol produces 450 gallons of fuel from the grain, plus 400 gallons of fuel from the corn cobs and stover biomass, plus 20 gallons of corn oil, plus 50 bushels of high protein livestock feed – used to produce dairy products, meat, poultry, fish, and farm-raised “seafood”.

    For soy, only 1/5 of the soybean is extracted for the oil, and that can go to food or fuel. The other 75% is high protein soy meal, which is also fed to livestock to produce food. Glycerin is a byproduct of biodiesel production that is being purified and made into value-added products also. And soybeans naturally enrich the soil by fixing nitrogen, displacing nitrogen fertilizer. All of these factors need to be evaluated and credited accurately to the lifecycle of biofuels. The EPA fails to do so.

    Even 70% of the oil extracted from a palm-oil plantation in Indonesia is used for human consumption, not biofuels.

    The demand for food is going to keep going up, as world population increases. If you see land being deforested in Africa, The Amazon, or Indonesia, the majority of it is being used for subsistence farming and livestock grazing, not biofuels or “replacement crops”. That’s after lumber companies and paper pulp companies have stripped the timber. A percentage of deforested land lays abandoned and unused for years afterwards. It’s a false assumption to claim that American corn based ethanol or American soy based biodiesel is causing deforestation in foreign countries. The facts on the ground prove otherwise.

    In “Deforestation Debunked”, Jackie Helling says an Amazon study conducted earlier this year, by the Soybean Work Group (GTS), “showed that of 630 samples of deforested areas since July 2006, only 12 had gone to soybeans and 200 to cattle. The remaining 418, or 70 percent, were unused – indicating that the main reason for cutting down trees was for timber and land grabbing.”

    Rainforest deforestation has been going on for decades, long before the recent expansion of biofuels.

    In the U.S. and many other countries, there is no shortage of food and no shortage of land, as biofuel critics would have you fear. We will have a large corn crop and a sizeable surplus this year, because foreign acreage of competing grain crops increased significantly. So do we now blame this expansion of foreign grain crops for deforestation? No – because, for the most part, that would be a false assumption.

    In the U.S., we only use one third of our arable land. And in many other places, including Russia, Africa, South America, and Australia, there is also a surplus of arable land. With the exception of densely populated countries like India and China, we have many years to go, before we need to be concerned about different crops competing against each other for arable land. And yields per acre continue to go up every year.

    Hypothetically, if indirect land use change was actually happening, expansion of a sugar crop in India could have caused it. Expanding rice or cassava in China could have caused it. A new palm oil plantation in Indonesia could have caused it. A new jatropha grove in Africa may have caused it. A new cattle pasture in Argentina may have caused it. An apple orchard in New Zealand could have caused it, and so on.

    Deforestation is Not automatic proof that biofuels are the cause. Yet a lawyer, a lobbyist, an environmental activist, a biofuels critic, the mastermind of indirect land use change theory, is steering EPA computer modeling to blame biofuels. That’s junk science.

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