U.S. policy promoting biofuels may have worsened climate change, study finds

The Energy Policy Act of 2005 established the Renewable Fuel Standard (RFS) program—a federal policy requiring that biofuels make up a gradually increasing percentage of transportation fuel. The program’s goal was to reduce oil dependence and greenhouse gas (GHG) emissions from transportation, the country’s largest source of climate-warming emissions. The policy, expanded in 2007, has helped make the United States the largest biofuel producer in the world. Most biofuel produced to meet the standard has been ethanol made from corn. 

New research published in the Proceedings of the National Academy of Sciences suggests that corn ethanol is less environmentally friendly than initially thought. In fact, once accounting for land-use impacts of increased corn production, ethanol likely emits more GHGs than gasoline. Although biofuels are made from plants, which absorb carbon as they grow, determining their overall effect on emissions is complicated—because there are environmental consequences associated with dedicating land to growing energy crops, rather than producing food or conserving ecosystems.  

The study, led by Dr. Tyler Lark of the University of Wisconsin-Madison, models the RFS’s impacts from 2008 to 2016 on U.S. land, water, and GHG emissions. To understand the policy’s system-wide impacts, the researchers first analyzed changes in crop prices. They then modeled how price changes affected crop planting decisions. Remote sensing observations of individual fields helped the researchers determine where changes occurred across the country. Finally, they quantified impacts on water, carbon dioxide, and nitrous oxide using biophysical modeling tools. Observed price and land-use outcomes were compared to a counterfactual scenario where the expanded RFS was not in effect. 

The researchers found that higher ethanol demand raised corn prices by about 30 percent. Spillover effects increased soybean and wheat prices as well. Higher prices, in turn, led farmers to grow more crops. This happened in several ways: expanding cropland area, planting more frequently, and leaving less cropland to regrow natural cover. The authors estimate that corn production on existing cropland increased by 2.8 million hectares (MHa) annually, or about nine percent. Land converted to cropland increased by another 1.8 MHa—an area larger than the state of Connecticut, and 26 percent higher than without the policy. 

The study found that these land-use impacts increased GHG emissions, counteracting the benefits of reduced gasoline consumption. Clearing land for agriculture releases carbon stored in soil and vegetation; the authors estimate this effect at around 320 teragrams (Tg) of CO2 equivalent, about equal to the annual emissions of Poland. Higher crop prices discouraged farmers from leaving cropland fallow, reducing carbon sequestration by about 77 Tg N2O emissions also increased by about eight percent from higher fertilizer use. 

Altogether, the findings suggest ethanol’s GHG emissions are no lower than gasoline’s, and likely about 24 percent higher. This is a large increase from the emissions intensity predicted in the RFS’s initial regulatory impact assessment. Estimating causal land-use emissions is difficult, and ethanol’s impact has probably lessened over time as production becomes more efficient. Nevertheless, the authors state that this emissions intensity finding is most likely an underestimate, as they did not consider certain factors like international land-use impacts or supply-chain emissions from higher fertilizer production. 

This research indicates that corn ethanol, as currently produced, is unlikely to yield the intended climate benefits. As policy plays a major role in driving biofuel demand, these results have significant implications for governments enacting climate policies. Bio-based energy sources will still likely have an important role to play in mitigating climate change. However, it is essential for policymakers to fully consider land-use implications of promoting biofuel use, and recognize that it comes with tradeoffs.