EU biofuels sustainability criteria "imperialist", could be illegal under the WTO

Under pressure from some NGOs in Europe, Environment Commissioner Stavros Dimas has said the Union might impose social and environmental sustainability criteria on imported biofuels. In an ideal world, there should be no problem with such rules - we all want our products to be produced in a sustainable way.

But in a market and modernity driven world, such criteria would constitute a series of 'non-tariff barriers' to trade that could be illegal under the WTO. Arguably, they would also be a form of 'green imperialism' and discriminate against poor countries who have a large technical potential to produce these fuels. If the EU wants poor countries to operate in what it describes as a 'sustainable manner', it should be willing to pay the extra cost. Or it should exclude its own biofuels, which are grown on land that once used to be forest. Else, developing countries should simply sell their biofuels to rapidly growing economies like China and India, which don't impose such discriminatory criteria because they understand that they form barriers to development.

What is more, for years NGOs in Europe have been campaigning and demanding that poor farmers in the South be granted more access to EU markets (which are protected by lavish agricultural subsidies and tariffs), and now that such a historic opportunity emerges because of biofuels, these very NGOs are against it. This is bizarre, to say the least.

But let us look at why proposed sustainability criteria could be socially and historically unjust. Regrettably, very few products in our global economy are regulated for sustainability: goods made in China with energy from coal, are neither socially nor environmentally 'sustainable', but they are massively imported into the EU; China has benefited greatly from this manufacturing boom as have European consumers (at least from a purely economic, consumerist perspective). Likewise, petroleum pumped up in Venezuela or Canada's tarsands is very environmentally destructive, but brings in large profits. The oil is imported with no questions asked. The same can be said for thousands and thousands of products.

Suddenly, for biofuels the EU is willing to make an exception. The reason? Biofuels signal a gradual shift in the geopolitics of energy from the wealthy North to the Global South, and would allow developing countries to exploit their natural comparative advantages to their benefit - something the West is uncomfortable with. Luckily for the poor countries of this world - the majority of who stand to benefit from trading biofuels because they have a large capacity to produce them - such criteria will be fought over at the WTO and could be deemed 'illegal' under the current trade rules.

But let's delve into the essence of the problem: the way in which modernity has worked in the West, and whether developing countries are entitled to go through a similar process.

NGOs have rightly pointed out some environmental problems associated with biofuels. Let's take the worst case: deforestation in Indonesia and Malaysia. Forests are logged, after which oil palm companies move in to plant a crop that yields a very high amount of oil. This industry has benefited these countries more than any other agricultural sector. Palm oil exports are now one of Malaysia's highest profit-generating sectors, after petroleum, and have lifted hundreds of thousands of people out of dire poverty. However, biodiesel made from this resource has been smartly marketed by some NGOs in Europe as 'deforestation diesel'. They want a ban on the fuel (and if it were up to them, on palm oil in general).

Obviously, palm oil producing countries - and many African countries will emerge as participants in this growing industry - will call this demand 'imperialist': Europeans are dictating others once again how to develop. NGOs, consumers and governments from the wealthy West indeed forget to mention that their own hegemonic position - their might to speak about such global environmental issues - is entirely based on the fact that they live in wealthy, post-industrial cultures where consumers are rich enough to embrace green sensitivities and lifestyles.

However, this luxurious and powerful position is the result of centuries of modernisation and industrialisation. The single greatest environmental transformation that enabled this modernity to emerge in Europe and North America, was massive deforestation. The US has 4% of its original forest cover left, the rest was destroyed to fuel the industrial revolution, well into the 20th century (map, click to enlarge). A similar history has occured in Europe. Deforestation allowed for large scale agriculture to feed rapidly growing populations, it allowed for urbanisation and for the growth of extensive transport infrastructures - all key to modernity. Only very recently, after these many decennia of industrialisation and wealth creation, forest cover in Europe and the US began to increase again gradually (earlier post).

The wealthy West now wants to deny poor countries the opportunity to go through this same process. It would indeed be great if developing countries were to 'leapfrog' the West and skip, for example, the deforestation-modernisation phase to enter into a highly efficient, post-industrial era at once. But this is of course totally illusory, because it would be extremely costly:
energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: non-tariff barriers :: deforestation :: modernity :: development :: trade :: WTO :: EU ::

And this is the crux of the matter: the wealthy West, including its NGOs, are not willing to pay for sustainable development in the South. They are all too willing to 'teach' ('dictate') these countries that they should avoid the dirty, destructive development pathway that allowed their own modernity. But putting up the cash to effectively allow poor countries to modernise without environmental side-effects, is too much to ask.

The simple fact is that such a post-modern development pathway would cost billions, if not trillions (compare with the wealth created in Europe and the US during its long industrialisation and modernisation phase). No politician in Europe or America will ask his citizens to give up a large portion of their wealth to pay up. It is much easier to simply impose sustainability criteria, and claim they are in the interest of these poor countries.

Developing countries should be allowed to produce biofuels the way they want. Countries that want to import biofuels only when they are produced in a manner they define as 'socially' and 'environmentally' 'sustainable', should pay for this extra service.

If the EU were to impose discriminatory sustainability criteria, it should at least contain a historic reference to its own agricultural sector, which is using land that used to be forest before the onslaught of the Industrial Revolution. Developing countries like India and China asked for a similar reference in Bali: the wealthy West carries a massive historical burden when it comes to greenhouse gas emissions - a cap on CO2 in poor countries would be discriminatory.

But it is unlikely that the poorest countries will be able to resist the imperialist biofuels dictates of European NGOs and governments. Perhaps, their only chance to benefit from their natural comparative advantages is to sell to other developing countries, like China and India, where fuel demand is growing rapidly. Maybe a Biopact based on South-South relations might be more realistic than one based on North-South relations.

Map: deforestation in the US as a result of the Industrial Revolution. Credit: Gary Ritchison, Department of Biological Sciences, Eastern Kentucky University, Human Population History.


Jonas Van Den Berg, CC, Biopact 2008.

Biopact: Global forest cover increasing; poverty main cause of deforestation - study - November 14, 2006