production of biofuel crops or when they convert natural land to cropland. Tese land-use changes are considered direct if farmers convert natural land cover directly to cropland for growing the feedstock crop used in biofuels within the biofuel- producing country. On the other hand, land-use changes are considered indirect if changes in market prices cause another crop to expand into natural land cover or if a reduction in exports from the biofuel-producing country (such as maize from the United States) causes farmers in other countries to convert natural land to cropland to expand produc- tion of those (or other) crops. Given the complex nature of domestic and international market link- ages, indirect land use changes are much harder to verify and observe than direct land-use conver- sions. Terefore, in 2009 the European Council (representing the governments of member states) and Parliament asked the European Commis- sion to examine the question of indirect land-use change, including possible measures to avoid it, and report back on the issue by the end of 2010. Te Commission then launched four stud-


ies to examine indirect land-use change issues. One study, conducted by the International Food Policy Research Institute (IFPRI), analyzed the impact of the European biofuels mandate and possible changes in Europe’s biofuel trade poli- cies on global agricultural production and the environmental performance of the European biofuel policy, as spelled out in the Renewable Energy Directive.7 Te report suggested that indi- rect land-use change was a valid concern but that there was a high degree of uncertainty regard- ing its magnitude. Following these investiga- tions and public consultation, in December 2010 the Commission published a report acknowl- edging that indirect land-use change can reduce the greenhouse gas emissions savings associated with biofuels. Because of the many uncertainties, however, the Commission did not deliver a clear recommendation about whether and how mea- surement of indirect land-use change should be included in the legislative framework. Te Com- mission announced that new research would be conducted and that an impact assessment report would propose several policy options.


During 2011 the discussions became more


intense. On the one hand, biofuel producers dis- agreed with the concept of indirect land-use change and claimed that even the debate and uncertainty about future legislation deters invest- ments and is costly to Europe’s economy and cli- mate change strategy. On the other hand, many members of the European scientific community and observers from the United States asked the Commission to reconsider its position regard- ing biofuels and urged it not to make emissions accounting mistakes regarding biofuels. Non- governmental and environmental groups actively highlighted the social risks linked to biofuels (such as “land grabbing” and competition between food and fuel uses) as well as the environmental risks (such as increased emissions). Although the Euro- pean Commission had not yet released its impact evaluation report by the end of 2011, it did release a new modeling exercise conducted by IFPRI on the land-use issue in October.8 Reflecting the fact that the merits of first-generation biofuels are highly disputed, the Commission also stated that it would no longer support biofuel projects in its overseas development policies.


UNITED STATES


In the United States, discussions of biofuel pol- icy take place at two levels. At the federal level, the US Environmental Protection Agency regu- lates biofuel blending through the Renewable Fuel Standard. At the state level, some ambitious states have set up their own biofuel policies (such as California’s Low Carbon Fuel Standard), seeking to improve upon the Renewable Fuel Standard in terms of environmental performance. In 2011 there were a number of policy discus-


sions at the federal level about whether the biofuel tax credit—called the Volumetric Ethanol Excise Tax Credit—should be repealed. In an atmosphere of increasing fiscal austerity within the United States, an unusual alliance of fiscal and social con- servatives and environmentally minded opponents of biofuels emerged around the issue of repealing the tax credit. Researchers have pointed out the welfare and efficiency losses that result when such


BIOFUELS, ENVIRONMENT, AND FOOD 51


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