Social impacts of biofuel cultivation

It is possible to get biofuels producers to manage their social impacts responsibly without strangling this fledgling industry, argues Bettina Reinboth, consultant at DNV

The interest in biofuels and bioenergy production and investment has been driven largely by the policies of national governments, both in developed and developing countries. The EU, US, Canada, Australia, New Zealand, Korea, Japan and a number of developing countries including Brazil, India, China, Thailand, Argentina, Philippines, and South Africa, have put in place targets and mandates in support of biofuels for transport.

There are legitimate sustainability-related concerns cited by a large number of stakeholders concerning biofuels and bioenergy, ranging from environmental issues, loss of biodiversity, carbon emissions, land use issues and detrimental social impact.

Under the right conditions, and with effective systems in place, biofuels can be produced sustainably. However at present there is significant risk of production that is far from sustainable. The environmental risks and benefits have attracted significant attention and dominated sustainability discussion on biofuels to date. Increasingly, project developers are conducting environmental impact assessments as part of an attempt to demonstrate the sustainability of biofuels to potential purchasers, importing nations and certification schemes.

The social aspects that remain are not being treated with equal weight. This is due in part to the lack of baseline social impact data as well as the complexities of social impacts which cannot always be dealt with at a local level, and require action from multiple stakeholders.

Within the EU and other developed countries the demand for biofuels and associated targets is greater than the potential domestic supply. Thus it will be necessary to source biofuels feedstock from countries where there is sufficient arable land and favourable agricultural conditions. These are likely to be developing countries, which is where the social impacts will come into play.

There is a concern that many of the developing countries from which biofuel feedstock will be exported to the EU either have poor regulations and/or suffer from poor governance, fraud or corruption. Such countries either lack the robust regulatory systems and monitoring capacities required to protect vulnerable communities and marginalised groups that are likely to suffer the social impacts of biofuel cultivation, or, they simply lack the will or interest to put the needs of potentially vulnerable and marginalised people ahead of economic gains that biofuel cultivation may provide.

Significant social impacts

One of the most significant social impacts related to biofuel stems from land use change. Where arable land is converted from the production of food to biofuel cultivation, significant direct and indirect impacts may occur. Impacts to food security is one of the primary concerns, in terms of scarcity of food supply, food production levels and impacts to price. At a national level, the displacement of food production means that the country may become reliant upon food imports to make up the deficit in domestic food production. Thus, the country becomes vulnerable to commodity market and food price fluctuations and potential food supply shortages.

At a local level, the higher price of biofuel feedstocks may attract smallholders or smaller-scale farmers (generally poorer populations located in rural areas that are dependent upon subsistence farming). Where these farmers switch from food production to the cultivation of crops for biofuels, they become dependent upon cash crops that are vulnerable to fluctuations in the international commodities prices. As long as the price commanded by the feedstock in question is greater than food prices, this is not an issue. However, if food prices rise or biofuel prices fall, the smallholder becomes vulnerable to food shortages.

The farming community that once was able to grow its own food may now no longer be able to feed itself. Thus, if smallholders are able to grow biofuel stock plants on their land along with food and other cash crops, this impact can be mitigated. However, due to the nature of biofuel cultivation monopsony is typical (cultivation of a single biofuel crop). This also results in increased vulnerabilities to pests, seasonal weather and climatic conditions, all of which can threaten the livelihood of the smallholders.

One solution that biofuel advocates have put forward is to use so-called ‘abandoned’ or ‘marginal land’ for the production of biofuel. However, this is still likely to entail a range of social impacts as today there is almost no such thing as empty land which is still able to support crop cultivation.

In reality, the labels of ‘abandoned’ or ‘marginal land’ are applied by governments and regulators who are in favour of biofuels development for economic reasons. This type of land is often occupied by poor, minority or indigenous groups who depend upon the land for their livelihoods. They tend to lack political power or representation and often have no formal title to the land which makes them vulnerable and thus are more easily displaced. Even where consultations with the local community are held prior to appropriation of the land for cultivation, often the voice of these marginalised populations is not heard.

At other times, it is a question of gender discrimination, whereby male representatives alone are consulted or are the ones to voice their opinions. The voices of women, who may have a more nuanced understanding of the social impacts due to their role in agricultural cultivation or domestic food and water harvesting, are not typically heard.

Displacement of peoples from land upon which they depend or have ties to can result in significant conflict related to land rights and related disputes, including scenarios in which displaced people encroach upon the land of others, often more marginalised than themselves. It may also result in the collapse of traditional livelihoods. Where local people have formal title to the land they may be encouraged or forced to sell the land, or it may simply be confiscated resulting in forced displacement, to make way for large-scale industrial biofuel feedstock cultivation. When displacement occurs that disrupts the social structure of the area, there is a real potential for negative consequences related to food security, as discussed above, as well as women’s and child rights, water access and violence resulting from land conflicts and disputes.

Typically, it is argued by producer governments that biofuels production will lead to an increase in jobs and alternative livelihoods for the rural poor who are often dependent on subsistence farming, as well as positively stimulate economic development. This might hold valid in some cases. However, it remains to be seen how likely these benefits are to arise and whether the social costs involved resulting from biofuels production would outweigh these beneficial claims made by proponents.

Furthermore, the quality of these income generating activities is questionable. By simply advocating the positives about biofuel production in terms of generating employment and income, it does not automatically translate into the notion that only positive social impacts will result. The opportunities must be assessed against alternative livelihood options that would realistically be available to the local people and the population most directly affected. For instance, the agricultural sector is well-known for the high risk of poor working conditions. The landless poor often work for powerful estate owners who do not respect their rights, and examples of slavery and forced labour on Brazilian sugarcane estates (one of the world’s major bioethanol producers) are often cited in the media.

Whilst there are certainly positive examples of smallholders organised into cooperatives that have benefited from the production of second generation biofuels, this sort of result does not come about on its own and must be cultivated through specially designed projects and policies. As of yet EU policies and sustainability criteria do not sufficiently take into account the complexities of land use change and the social impacts outlined above, to enable carefully designed mitigation strategies that would result in a win-win approach for those in biofuel producing countries as well as consumer countries.

Potential solutions

The concerns discussed above have driven the development of EU regulations and international certification schemes. The EU regulations are a good start, but there should be a push to ensure that biofuel production in developing countries contributes to sustainable development. This will require that not only environmental and economic issues are taken into account, but also social issues need to be included to a greater extent in the future.

The EU regulations address carbon emissions and direct land use change issues. As complex as these issues are, it has been demonstrated that they can be addressed at a local level by biofuels developers. Impacts from indirect land use change (ILUC) require attention and focus also at an international level. The current system for approval of biofuels in the EU does not include formal requirements to ensure that biofuels have been produced in a way that takes into account social impacts and mitigates these where possible.

Another way to ensure the sustainability of biofuels is through the application of voluntary certification mechanisms. Existing certification schemes tend to only include limited environmental and social aspects. However, the Roundtable for Sustainable Biofuels (RSB) is one of the few that has included social impact indicators in the certification system. These are related to human rights, working conditions, health and safety, child labour, freedom of association and collective bargaining rights, plus social benefits to local community and rural development.

Social impact indicators play a key role in enhancing the credibility and acceptance of sustainability certification. However, the development of appropriate indicators that take into account locally significant issues, and the ability to verify these indicators in order to ensure a positive social outcome is challenging. This is due in part to the difficulty of monitoring social criteria and enforcing adherence to social policies in developing countries, which is in turn dependent upon national regulatory and enforcement systems that are often under capacitated and ineffective. Furthermore, social issues vary from country to country, and may not be the same in Indonesia as in Africa, for example. There is an increasing demand for standards to be able to take into account nuanced social impacts that are locally diverse. In order to be effective, this would require international governance and support.

Social impacts at a local level can be accounted for within management systems including traceability systems. For example, if we think back to the potential negative impacts upon smallholders, discussed above, traceability requirements could be defined to take into account and demonstrate local conditions that make the cultivation of biofuel feedstock sustainable for smallholders.

Increasingly, environmental impact assessments are being conducted at a local level by biofuels project developers. Currently, social impact assessments are not mandatory. Regions where biofuels are currently being developed or likely to be developed in future are often areas where the social issues will be the most complex. These are also often the areas where project developers have little available data to use as baselines. However, developers ignore social impacts at their peril as they pose serious risk to biofuels cultivation and development in many of the geographies where biofuels will be produced.

It is acknowledged that social impact assessment in relation to biofuels cultivation is challenging. Certainly from the perspective of biofuels developers and project owners, the challenge is greatest where there is little information at a national level and thus project owners are required to determine a large number of social impacts that may or may not be directly affected by the cultivation of biofuels in a given location. This puts an enormous cost on project developers in developing countries where the baseline data required to conduct social impact assessment, including information on land use, water use, food security and health are lacking. Financial investment and assistance is required to enable countries to develop and implement frameworks for the collection and production of robust social and environmental baseline data. Greater availability of baseline data could enhance certification and regulatory systems that would ensure biofuel projects contribute positively to local communities through sustainable social development.

The social impacts outlined above will take time to address and adequately account for. What is required is a progressive approach towards inclusion of social impacts within certification and regulation schemes.

At present there is significant financial pressure upon biofuels production. Therefore care needs to be taken to ensure that the challenges in determining the impact of biofuels cultivation upon local communities does not hinder sound projects from going ahead. It is for this reason that social impact assessment and certification requirements must be progressive.

Similarly, projects that do not meet social standards need to be supported by international factors to develop mitigating strategies resulting in positive social impacts over time. What is important is that the social issues are acknowledged and that biofuel cultivation fosters positive social impacts over time, with a view to continuous improvement, rather than brushing these issues under the carpet or pretending that current regulatory or certification schemes are sufficient.

This article is reproduced by kind permission of Biofuels International