Palm | Kelapa Sawit

15/04/2011 (City Journal) - We're less than 50 years from the end of world oil supplies at current consumption rates according to a new report by HSBC bank. That coming shortage has brought new calls for increased reliance on biofuels, including from President Obama in last month's energy speech. Biofuels are made from crops like corn, sugar, palm oil and cassava root which are harvested and then shipped to plants to be converted into fuels like ethanol.

While it's likely that biofuels will play a significant role in powering more efficient vehicles in the US and China, the poor nations that rely on these crops for food are facing rising rates of hunger and poverty as a result. Research by the World Bank found that an increase in biofuels production over 2004 levels would push more than 35mn additional people into absolute poverty, or an income of less than $1.25 per day. An analysis in the spring 2011 issue of The Journal of the Association of American Physicians and Surgeons, meanwhile, used statistics from the World Health Organisation (WHO) to estimate that our growing need for biofuels will result in at least 192,000 excess deaths from hunger and poverty every year. This is higher than the 141,000 deaths the WHO estimates to be caused by global warming each year.

The United Nations Food and Agriculture Organisation reports that 2011 has the highest food prices yet recorded. Despite the price of corn rising 73% in the US late last year, in part due to 40% of the crop now being used to make biofuel, Americans will probably only see a 2-3% increase in food prices in 2011. "For Americans it may mean a few extra cents for a box of cereal," said Marie Brill, senior policy analyst at ActionAid, an international development group. "But that kind of increase puts corn out of the range for impoverished people."

Though this year's skyrocketing food prices can also be attributed to high oil prices and severe weather events destroying crops in Russia and Australia, the market for biofuels also bears some responsibility. "What is certain is that biofuels are playing a role," said Oliver Dubois, a bioenergy expert at the Food and Agriculture Organisation in Rome.

This is especially true since many industrialised countries are aiming a transition from reliance on fossil fuels to greater use of biofuels.