Biofuels, Agriculture and Poverty Reduction

The development of biofuels has generated vigorous debate on economic and environmental grounds. Our attention here is on its potential impacts on poverty reduction. The potential is large, whether through employment, wider growth multipliers and energy price effects. But it is also fragile: it will be reduced where feedstock production tends to be large scale, or causes pressure on land access, and its success can be undermined by many of the same policy, regulatory or investment shortcomings as impede agriculture. Whilst some of the factors facilitating, and impacts of, biofuels can be tracked at global level, its distributional impacts are complex, and point to the need for country-by-country analysis of potential poverty impacts.