5. Analysis of the potential impacts of changes in bioenergy technology and finance on forests and local livelihoods
First-generation biofuels can be used in low-percentage
blends with conventional fuels in most vehicles and distributed
through existing infrastructure. Some diesel vehicles can run on
100% biodiesel (B100) and “flex-fuel” vehicles are already
available in many countries around the world. Replacing a
percentage of diesel or petrol with biofuels is therefore the
simplest way for the transport sector to make an immediate
contribution to climate change mitigation targets, particularly
given that the benefits would apply to the entire vehicle fleet.
One of the most promising second-generation biofuel technologies
– ligno-cellulosic processing – is already well advanced. There
are other technologies to convert biomass to liquid biofuels (BtL),
such as Fischer-Tropsch biodiesel and bio-DME (dimethyl ether).
The varying prospects for biofuels production and use in
developing countries are related to the types of end products
(e.g. first and second generation biofuels), type of feedstock
produced, and to a range of economic factors.
The potential impacts of bioenergy development are also driven by
financial sector actors and procedures. The extent to which financiers
employ adequate risk assessment, due diligence and social-environmental
impact and safeguard procedures will shape where capital flows and how
it is utilised. The potential for shaping the behaviour of financial
sector actors is a significant opportunity for leveraging far-reaching
impacts on corporate behaviour, and needs to be explored.
Scenarios for different bioenergy technologies and
their impacts of tropical forests
Scenarios are being developed to analyse the impact of different
technologies (first and second generation biofuels, processing
technologies, etc.) on tropical forests and land-use in developing
countries. The variables considered in the scenario
analysis include: (i) the potential scale of production; (ii) the size
of the national or regional market; (iii) infrastructure investments
needed; (iv) the supportiveness of the legal and institutional
framework; (v) options for export (e.g. EU, USA, Japan, China); and (vi)
the market price of the feedstocks.
Analysing instruments for enhancing the
accountability of financial institutions to social and environmental
impacts of bioenergy investments
Research analyses how financial institutions and decision-making
processes can be strengthened to promote more sustainable and equitable
outcomes. These might include tools for improving the decision processes
of investment institutions such as risk analysis, due diligence and
social-environmental impact assessments and safeguard procedures. It
might also include mechanisms for enhancing the transparency and
accountability of hedge funds, private equity institutions and other
emerging financial instruments.