Cost and Benefit

Cost and Benefit

(1) Advantages:

i. Energy balances, greenhouse gas emission reductions, land use requirements, and competition for food, fiber and water, eg:

ii. Job creation and regional growth:

Net job effects depend on the agricultural structure in the country. The use of residues for 2nd generation biofuels can add value to the local agricultural sector and can create additional market opportunities to increase income. That is, farmers can profit from residues, while plant operators can profit from increasing demand for processing residues.

(2) Disadvantages:

i. The 2nd generation biofuels do not produce animal feed.

ii. High cost

(3) Risks:

i.

Feedstocks for the 2nd generation of biofuels do not compete with food and fiber, but may lead to the exploitation of land and labor by large companies seeking government support. Government support may allow large companies to buy land cheaply, which may lead to underproduction of food and drive down the food supply. This will especially become serious if the large companies do so in developing countries, because such behaviors will reduce the amount of available land for the local people, and the companies may exploit the local people for cheap labor.

ii.

Traditional buyers of the residues (for 2nd generation biofuels) may suffer relative income losses.

iii.

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