A paper “Measuring Unmeasurable Land-Use Changes from Biofuels” by Iowa State’s Bruce Babcock seeks to provide an “overview of the procedures used to estimate indirect land use” that are being used by the Environmental Protection Agency (EPA) and California Air Resources Board (CARB).
According to Paul Winters of the Biotechnology Industry Association (BIO), the indirect land use change theory bears no resemblance to reality. In a posting on BIO’s blog, Babcock frames the debate over indirect 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.
But, instead of worrying whether is should or should not be measured with models, what is interesting in Dr. Babcock’s article is that he is showing that with time the accuracy of ILUC calculations will improve. Consider this paragraph:
We have a fairly good idea of the response of U.S. livestock producers to higher feed costs: given enough time, livestock supplies will be reduced, resulting in higher meat and dairy prices. But economists’ ability to estimate how Brazilian cattle ranchers will respond to the resulting increase in demand for Brazilian beef is less precise. The Brazilian cattle sector is simply less well understood than the U.S. livestock sector (even by Brazilian economists). The sector has had less scrutiny, and data measuring its performance and structure is much less developed.
More often than we want to admit, economists face situations in which we do not have adequate data to make precise estimates of the response of a sector to a price change. The backup strategy is to rely on economic theory to determine the direction of the response, and then to make a reasonable assumption about the magnitude of the response. For example, as anybody who has taken Econ 101 knows, supply curves slope up. This means that the quantity supplied to the market will increase if market demand increases. Thus, economists know that the Brazilian cattle herd will increase by some amount if U.S. meat supplies decrease. But an informed judgment about the magnitude of the change will rely on a trade economist looking at Brazilian trade policy to determine the extent to which a change in U.S. meat supplies will affect Brazilian prices. Then an experienced agricultural economist will know something about the cattle cycle and estimate how long it might take for the Brazilian cattle herd to respond to a price increase. A dedicated Brazilian agricultural economist with detailed knowledge of Brazilian environmental enforcement mechanisms will then make an estimate of the extent to which pasture can expand in frontier forests. This estimate will then be linked with the cattle cycle and the price transmission to come up with an informed estimate of the timing and extent to which the Brazilian cattle herd will change in response to an increase in feed prices caused by biofuels expansion.
It seems that with just a little more word, we may well have more accurate figures for ILUC. And maybe, just maybe, the naysayers and the yessayers will have something to agree on with regards to sugarcane biofuels.
Filed under: Biofuels, Cellulosic, Climate Change, Corn, Deforestation, Enviroment, Ethanol, Food vs. Fuel, GHG, ILUC, LCFS, RFS, Sugarcane, Sustainability | Tagged: Babcock, Biofuels, Cattle, Deforestation, Ethanol, ILUC, Iowa Ag Review, Searchinger
