Biofuels: economic, environmental and social benefits and costs for developing countries in Asia

Biofuels are being supported by many governments for a range of perceived benefits including improved domestic energy security, reduced greenhouse gas (GHG) emissions when compared with fossil‐fuel counterparts, and economic development and employment generation, particularly in rural areas. Life‐cycle, cost‐benefit, and systems analyses, however, indicate that the expansion of biofuels can have complex effects on, and interactions with, land use and food and fuel prices. This article reviews the economic, environmental, and social benefits and costs of biofuels using experiences from developing countries in Asia. The review reveals the following: (1) biofuels are generally not economically competitive with fossil fuels and government support, though prevailing, is costly and questionable. (2) Although biofuels are generally viewed to be a threat to food security, if properly managed, their development could lead to improved productivity in the agriculture sector over the long term with benefits for rural livelihoods and food security. (3) Even though reducing GHG emissions is a key driver for the development of biofuels, effects in terms of soil quality, biodiversity, and water quality must also be assessed; the environmental benefits of biofuels are debatable and depend on a range of fuel‐specific factors, management, and agricultural practices. On the basis of this assessment a range of strategies are suggested to further improve the sustainability of biofuels in Asia. WIREs Clim Change 2013, 4:497–511. doi: 10.1002/wcc.241 This article is categorized under: The Carbon Economy and Climate Mitigation > Benefits of Mitigation Climate and Development > Decoupling Emissions from Development