Box 4-4. Controversies on bioenergy use and its implications
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(a) Net energy gains and greenhouse gas emissions
There are many studies on the net energy gains of bioenergy, but results differ. These differences can often be traced to different technological assumptions, accounting mechanisms for by-prod­ucts and assumed inputs (e.g., fertilizers). In some the production of ethanol from maize energy outputs has a small net gain (Farrell et al., 2006), while in others the net result is negative (Cleveland et al., 2006; Kaufmann, 2006; Hagens et al., 2006). Some other crops have a more positive energy balance, including ethanol from sugar cane, oil crops and conversion of cellulosic material (e.g., switchgrass) to second-generation biofuels. The greenhouse gas balance, a function of production patterns and agroclimatic con­ditions, is also important. Maize ethanol in the U.S. is believed to cut GHG emissions only by 10 to 20% compared to regular gaso­line (Farrell et al., 2006) but some other crops are reported to ob­tain better reductions, e,g., ethanol from sugarcane—up to 90% reduction (CONCAWE, 2002; Farrell et al., 2006; Hill et al., 2006) and biodiesel up to 50-75% (CONCAWE, 2002; IEA, 2004; Bozbas, 2005; Hill et al., 2006; Rosegrant et al., 2006). More conservative analyses represent a minority, but they point to potential flaws in the mainstream lifecycle analyses, most notably with respect to assumptions about land use and nitrous oxide emissions.

(b) Costs of bioenergy
Studies on bioenergy alternatives generally find the low cost range from bioenergy to start at around $12-15 per GJ for liquid biofuels from current sugar cane to around US $15-20 per GJ for production from crops in temperature zones. In most cases, this is considerably more expensive than $6-14 per GJ for petroleum-based fuels crude oil price for oil prices from $30 per bbl to $70 per bbl. It is expected that costs of biofuels (especially the more advanced second-generation technology) will be further reduced due to technology progress, but the actual progress rate is highly uncertain. Agricultural subsidies and the economic profitability also affect the value of emission reductions under different cli­mate policy scenarios.

(c) Impact on land use
A serious concern in the debate on biofuels is the issue of land scarcity and the potential competition between land for food pro-
Implications for agriculture. Based on the discussion above, one possible outcome in this century is a significant switch from fossil fuel to a bioenergy-based economy, with agricul­ture and forestry as the leading sources of biomass (FAO, 2006f). The outcomes can be unclear. One can envision the best scenarios in which bioenergy becomes a major source of quality employment and provides a means through which energy services are made widely available in rural areas while it gives rise to environmental benefits such as carbon reductions, land restoration and watershed protection. On the other hand, one can envision worst case scenarios in which bioenergy leads to further consolidation of land hold-

duction, energy and environmental sustainability. The production of 1st generation biofuels from agricultural and energy crops is very land intensive. Land evaluation depends on (1) availability of abandoned agriculture land, (2) suitability of degraded lands for biofuel production and (3) use of natural areas. Obviously, biofu­els can also compete with food production for current agricul­tural land and/or expansion of agricultural land into forest areas. Examples of this can already be seen where expansion of crop plantations for biofuels production have led to deforestation and draining of peatlands, e.g., in Brazil, Indonesia and Malaysia (Cur-ran et al., 2004; FOE, 2005; FBOMS, 2006; Kojima et al., 2007).

(d) Impact on food prices
As long as biofuels are produced predominantly from agricultural crops, an expansion of production will raise agricultural prices (for food and feed). This has now become evident in the price of maize (the major feedstock in U.S. ethanol production), which increased 56% in 2006. Price rises are expected for other bio­fuels feedstock crops in the future (OECD, 2006; Rosegrant et al., 2006). This increase in price can be caused directly, through the increase in demand for the feedstock, or indirectly, through the increase in demand for the factors of production (e.g., land, water, etc.). More research is needed to assess these risks and their effects but it is evident that poor net buyers of food would suffer strongly under increasing prices. Some food-importing de­veloping countries would be particularly challenged to maintain food security.

(e) Environmental implications
Whereas implications for the environment are relatively low for current small-scale production levels, high levels of biofuels feed­stock production will require considerable demand for water and perhaps, nutrients. Some studies have indicated there could be tradeoffs between preventing water scarcity and biofuel produc­tion (CA, 2007). Bioenergy production on marginal lands and the use of agricultural residues could negatively affect soil organic matter content (Graham et al., 2007).

ings, competition for cropland and displacement of existing livelihoods while it incurs environmental costs of decreased biodiversity and greater water stress (World Bank, 2005a).
     Currently, bioenergy fuel use is rapidly expanding in response to government policies and subsidies, high energy prices and climate policy initiatives. In this context, bioen­ergy can also offer development opportunities for countries with significant agricultural resources, given lower barriers to trade in biofuels. Africa, with its significant sugar cane production potential, is often cited as a region that could profit   from  Brazil's  experience   and  technology,  though obstacles to realizing it (infrastructure, institutional, etc.)