Bioenergy

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.