August 2010: The International Food Policy Research Institute (IFPRI) has published a discussion paper titled “Modeling the Global Trade and Environmental Impacts of Biofuel Policies,” which provides an economic analysis model of the indirect land-use change effects related to biofuel, and in particular bio-ethanol, policies.

The IFPRI model shows how biofuels production globally is affected by biofuels policies of the US and the EU, with and without ethanol trade liberalization. Also incorporated into the scenarios are the effects of various types of biofuel feedstock crops, variable energy demand and substitution, and carbon emissions. The authors note that their methodology is at an early stage and “results should be interpreted with some caution.” These findings, however, do offer some initial insights, such as that ethanol biofuel production only has environmental benefits under certain restrictive assumptions, and in most cases that “ethanol programs significantly worsen the total carbon balance of biofuel policies.” The discussion paper also finds impacts of trade liberalization to be ambiguous and highly dependant on land-use policies of producing countries. IFPRI is a member of the Consultative Group on International Agricultural Research (CGIAR). [The Discussion Paper]