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Socio-Economic and Ambient Impacts of Sugarcane Expansion in Brazil: Effects of the Second Generation Ethanol Production

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Biofuels in Brazil

Abstract

The growing demand for clean energy sources to replace petroleum has substantially expanded the use of biofuels—fuels produced from agricultural products. For Brazil, instead of representing a hindrance to growth because of the need for changes in the country’s energy mix, this represents a great opportunity to generate value and income, since the country has clear comparative advantages in producing these fuels from renewable sources. The main biofuel in the country is ethanol, made from sugarcane. The country’s cane growing sector has been undergoing intense transformations, with the attraction of foreign capital, opening of new distilleries and intensification of mergers and acquisitions. However, doubts have been raised about the socioeconomic effects of the spread of sugarcane growing, such as the effects on the environment, labor market, social conditions and food prices, among others. This work reviews the papers that discuss these impacts. The results suggest that the expansion in recent years helps to improve the capital-labor relationship; the sugarcane growing is not the cause of increased land and food prices; the environmental indicators in sector is better than fossil fuel sector, or other relevant concurrent; the sector has no significant effects (positive or negative) on social conditions in cane growing regions, and that the sector can contribute positively by increasing local tax revenue.

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Notes

  1. 1.

    The argument, however, seems valid with respect to the price of food at wholesale. This difference between the consumer price and wholesale price, is possibly due to the fact that wholesale prices closely follow production decisions, while consumer prices also depend on industrial dynamics and technological innovations, that can dampen the effects of any reallocation of land use.

  2. 2.

    The estimate of total fossil energy used in field operations, including the transportation of cane to the mill and the supply of inputs, is 12329.7 MJ/ha/year. Already tickets fossil energy associated with the material used in the construction and equipment of plants representing 2,611 MJ/ha/year, totaling 14940.8 MJ/ha/year.

  3. 3.

    In São Paulo state, 8.1 % of the cane area refers to riparian forests. Of this area, 3.4 % have natural forest and 0.8 % was reforested (Chagas 2013).

  4. 4.

    There is a discussion regarding the responsibility for the preservation of protected areas and legal reserves. The plants produce using own cane, sugarcane produced on land owned and leased areas, and third-party sugarcane, obtained from the suppliers. In relation to land owned and third-party suppliers, there is no doubt about the responsibility, but in relation to leased areas is doubtful.

  5. 5.

    As the vinasse is a valuable organic fertilizer and a source of replacement water into the soil, your use reduces the need for fertilizers and water. There exist rigorous restrictions on the amount of vinasse used by area, so there is no problem of contamination of the soil, and the plants.

  6. 6.

    The limits of use are determined and monitored by specific department, and the producers are required to return the packaging used.

  7. 7.

    In São Paulo, the Environmental Protocol signed between the plants, sugarcane producers and the government establishes the order of the burned areas for mechanization in 2014 and in all areas in 2017.

  8. 8.

    To calculate the spatial propensity score were considered neighborhood effects, as the proximity of county to sugar mill and a dummy variable for those located in states dense sugarcane production. The spatial effects capture both the fact that in a region whose neighbors are producers, the probability of producing sugarcane is higher (dependence or spatial autocorrelation), as well as the specific soil and climate of each region. The second part seeks to control the probability of production take place in regions near the plants (potential plaintiffs production). The last one captures state effects specific, such as legislation, ease of flow of production, access to tax incentives, etc.

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Authors and Affiliations

  1. Department of Economics, and CNPq (Proc. 481027/2011-4), University of São Paulo, São Paulo, Brazil

    André Luis Squarize Chagas

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  1. André Luis Squarize Chagas
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Correspondence to André Luis Squarize Chagas .

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  1. Department of Biotechnology, Engineering School of Lorena, University of São Paulo, Lorena/SP, São Paulo, Brazil

    Silvio Silvério da Silva

  2. Department of Biotechnology Engineering School of Lorena, University of São Paulo, Lorena/SP, São Paulo, Brazil

    Anuj Kumar Chandel

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Chagas, A.L.S. (2014). Socio-Economic and Ambient Impacts of Sugarcane Expansion in Brazil: Effects of the Second Generation Ethanol Production. In: da Silva, S., Chandel, A. (eds) Biofuels in Brazil. Springer, Cham. https://doi.org/10.1007/978-3-319-05020-1_4

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