Does palm biodiesel driven land use change worsen greenhouse gas emissions? An environmental and socio-economic assessment

Abstract

Biodiesel is widely promoted to replace conventional diesel based on considerations of energy security, resource depletion, and global warming mitigation. The extent of greenhouse gas emissions may vary depending upon the type of land area converted for biodiesel crop cultivation. In addition, the economy and society are also affected both positively and negatively. The objectives of the study are to 1) evaluate the effect of biodiesel demand in Thailand on types of crops, 2) estimate the magnitude of change in both land area and prices of the converted crops, and 3) assess sustainability by integrating environmental and socio-economic impacts associated with land use change. Correlation analysis, multiple regression, econometric modeling, and eco-efficiency are used in evaluating crops affected as well as percentage changes in the converted crop area and crop prices, and the sustainability of biodiesel, respectively, as the Royal Thai Government targeted in the Renewable and Alternative Energy Development Plan (AEDP). The study revealed that coffee, rambutan and rice are significantly affected by oil palm expansion. Consequently, the greenhouse gas emissions due to land use change arising from the AEDP are projected to be lower than without land use change. The socio-economic impacts cover positive impacts, i.e., currency savings and increases in farmers' income due to higher prices of oil palm, and negative impacts, i.e., increases in prices of foods, such as bottled palm oil, and biodiesel for energy use. Compared to conventional diesel (B0), the net socio-economic impact of 2% biodiesel (B2) is better, but 5% (B5) and 10% (B10) are worse. When land use change is integrated, the net socio-economic impacts of B5 and B10 become better than those of B0. The eco-efficiency analysis shows that biodiesel blends at 9% would be the optimum.