An international sustainable development research group is urging governments, including Canada’s, to step back from the rush to support biofuel development through policies and tax incentives.
“The question has to be asked: can governments justify gambling so much of the public’s money when the benefits are so questionable?” asked David Runnalls, Ottawa-based president of the International Institute for Sustainable Development.
The IISD, based in Geneva, has compiled an analysis of biofuel support policies in Canada, the United States, the European Union, Australia and Switzerland.
It concluded that by last year, developed country governments had pledged $10.5 billion Cdn per year to encourage the industry.
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Although Canada is a relatively minor contributor compared to the U.S. and the EU, the Conservative federal government has followed its Liberal predecessor by promising or providing more than $300 million for industry expansion.
It also has promised that a minimum percentage of ethanol and biodiesel will be required in Canadian fuel by 2010 and several provinces have chipped in with their own tax breaks on biofuel products.
The IISD said governments in countries such as Canada should block any escalation in subsidies until more data is available and avoid, if possible, a mandated biofuel content.
It questioned whether the greenhouse gas reductions promised by biofuel promoters will materialize if all the pollution and chemical use effects of growing, harvesting and transporting grain and oilseed feedstocks and manufacturing biofuel are calculated.
It suggested the rush to biofuel support is driven by rural and agricultural development and support goals rather than sound environmental policy.
As well, it argued that biofuel industry demands for government support will escalate rather than
diminish as the industry becomes established.
“An urgent case for a moratorium on new support measures and a thorough review of existing ones is advanced in order to avert undesirable fiscal and environmental consequences,” the report said.
A representative of the Canadian biofuel industry refuted the claims.
“There are lots of debates out there around various aspects of this: environmental benefits, environmental impacts, food for fuel,” said Robin Speer, director of public affairs for the Canadian Renewable Fuels Association.
“But the critics are completely off base on these
issues.”
He said the industry needs public policy support because it is nascent and competing with subsidized industries in other countries.
Governments offer support because they recognize the environmental benefits, the wisdom of diversifying fuel sources, the farm income benefits of higher grain prices and the rural development spinoff from ethanol and biodiesel plants.
