Back to the future in energy: biofuels

Bioenergy is obtained from materials originating from living or newly-harvested organisms. These include oils, fats, fibers, residues, wastes, and the like. The International Energy Agency (IAE) points out that two hundred years ago, virtually all energy consumption originated from bio-energy. However this was displaced by a more readily available and low cost source, namely fossil fuels (which originate from long-dead organisms, and are therefore non-renewable, except in a useless sense on a geologic time scale.)

However, recently, rising global demand for energy and all-time high nominal prices for petroleum are causing a large-scale shift towards alternative energy sources. Also driving the search for alternatives is are the numerous environmental problems linked to fossil fuel use, including global climate change.

In Asia, renewable energy accounted for as much as 24% of total energy usage in 2003, over ninety percent of which originated from combustible renewables and waste. The rural poor in developing countries are highly dependent on bioenergy. Four out of five households without electricity are found in rural areas of developing countries (FAO, 2005); such households rely on fuelwood and charcoal for most of their energy needs. Large sections of the rural poor have been bypassed by modern, centralized, energy generation and distribution systems. Bioenergy opens exciting opportunities for more accessible technologies for meeting the energy needs of the poor.

Back in college, for a group paper I and some classmates had a most enjoyable trip to Maya Farms in Rizal, Laguna. (Incidentally, my groupmates were all nice ladies, which played no small role in the recreational value of the experience - at least on my part.) Maya Farms - you may recall seeing its products in the supermarket - is a leader in integrated biogas generation. It is energy self-sufficient, with all its electricity internally produced from pig manure. Not an ounce of excrement flows out to pollute the adjacent river leading into Laguna Lake, unlike so many livestock enterprises (both large and small) dotting the perimeter of the Lake. Now that's a large scale, hi-tech operation. Perhaps small scale options, appropriate for rural communities and households, are feasible for decentralized power distribution among the energy-deficient rural poor. The future may well be in fats, fiber, detritus, and dung.

The IAAE

I did get back from Brisbane last Saturday, but spent the next few days recuperating and attending to some backlog. During the IAAE conference I had concentrated on attending the symposium on Sustainable Development in Fisheries and Aquaculture: Challenges for Economists, which ran for a couple of days in the afternoon. I had a presentation, mostly on my engagements in supply-demand modeling for fisheries for the WorldFish Center. Interestingly, that was the only conference session on fisheries and aquaculture for the IAAE.

Aside from that I was in several plenary sessions, including the opening one with the Presidential Address by Prabu ("Agricultural Development through the Globalization Lens") and the Elmhirst Lecture by Hans Binswanger (on empowerment of the rural poor). Both interesting and stimulating, but not the best. Prabu I think should have devoted some time discussing whether the conventional arguments for the priority role of agriculture in development (Johnston-Mellor-Kuznets-Chenery, et al) still hold water in an open economy setting. Hans should have focused on his main topic, but his second half got diverted into agricultural investment and the usual issues favored by economists (market-led development, getting prices right, focusing on public goods, etc.) Another interesting session was the Impact Assessment of Integrated Natural Resource Management in the CGIAR, chaired by Herman Weibell. (Yes, the soft stuff can get some increasingly "hard" treatment from the econometricians and modelers.)

So that was pretty much it for me. (Oh, I got to see sheep shearing in the field trip. Fun, in a tourist trap sort of way!)

It was my first IAAE meeting, and it was said to be the best. It may well have been. Congratulations to the organizers, especially the Program Committee led by Kei Otsuka (that enormous program must have induced much vertigo). Here's to a thought-provoking - and healthy! - conference in Beijing 2009.

Down time

Most unfortunately, I am down with a fever and a cough while attending the IAAE Conference. Have been halfheartedly attending, but today I opted to just rest in my hotel. Bummer. Just so you know why my posts have been stuck at (1) for a week!

IAAE meeting (1)

I scrolled down the economics roundtable and found no one blogging about the 26th International Association of Agricultural Economics Conference. Not even John Quiggin, who chairs a session. Perhaps I'm the only one who thinks this is interesting? I'm not even a member. (My previous memberships, aside from local associations, were with the IIFET and the Asian Fisheries Society, but alas both have lapsed.)

Today is just the preconference workshops (for which I haven't registered). So the actions starts tomorrow.

Contributions of agricultural economics

The International Agricultural Economics Association (IAAE) holds its triennial conference in Gold Coast, Brisbane, Australia. Numerous luminaries will make their appearance. Needless to say, plenty of juicy topics to bite into - just check out their site.

Unfortunately as some of you may have noticed, I've been a bit remiss with this weblog in between deadline pressures and preparing papers and presentations for conferences like this. (And this weblog - for the second time - is being prepared in Changi airport. Free internet is fabulous!) Though no question, it's a great opportunity for me to attend. Anyway, lemme see if my posting can pick up with this.

Triumph of rent-seeking

In economics, "economic rent" has a special meaning of "income received by a factor in excess of its opportunity cost." From this came the famous concept of "rent-seeking", which is the allocation of resources to produce rent. In a competitive market rent is dissipated by competition, hence rent-seeking typically involves some type of market restriction.

The Doha Round has gone into stupor, collectively chloroformed by myopic trade negotiation. At the heart of this myopia is naked, insolent rent-seking. Rent-seeking cuts a wide multi-sectoral swath - industralists, farmers, union workers. This motley crowd is earning more than they would under free competition (sans subsidies, tariffs, and quotas). The difference is all rent, and they feel born to this entitlement. Buyers of foreign goods of course must contend with narrower choices and more expensive goods. Their well-being - and of those better able to supply them - be damned.

Rent-seeking is alive and thriving even in countries where free market liberalism is most widely accepted. Its forces are most entrenched in agriculture, the arena where the Doha round bit the dust.

Since WTO decisions are by consensus, I frankly see very little hope of resolution. Nearly every two-bit country like the Philippines is bringing a hardline stance to the bargaining table. It's only the big sexy countries that are hogging the headlines now. Even if their disputes could be resolved, there is a practically endless succession of countries waiting to show how stubborn they are.

Maybe I'm too pessimistic - negotations between rent-seekers may yet end up compromising on more liberalization, as demonstrated by the earlier GATT rounds, culminating in the Uruguay round. On this score I'll be glad to be mistaken.