Water–Energy–Food Nexus in Sugarcane Ethanol Production in the State of Goiás, Brazil: A Regional Input-Output Analysis
- Publication Type:
- Thesis
- Issue Date:
- 2020
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Concerns about the impact of biomass growth for biofuel production emphasise the importance of planning the expansion in energy crops, taking into consideration water, energy and land resources, as well as greenhouse gas emissions (GHG). This research analyses the impacts of first-generation sugarcane ethanol expansion in the Paranaíba basin (Goiás State, Brazil), focusing on how future demand for ethanol could affect the socioeconomic, energy and environmental outcomes in the region. An economic-ecological input-output (IO) framework was applied to develop a water-energy-food nexus (WEFN) analysis on ethanol production. A Leontief IO price framework was also applied to analyse the economic and environmental impacts of changes in factor input prices, resulting from the imposition of a US$10 carbon tax. The results show that sugarcane expansion would apparently have little significant direct impact on land and water availability in the Paranaíba basin, when price change effects (through a carbon tax policy) are not taken into account. Conversely, however, when a US$10 carbon tax policy is applied, the negative environmental impact (of economic changes) of expanding sugarcane crops in Goiás would be 5-fold higher as compared with the non-carbon pricing scenarios; thereby significantly changing the big picture of promoting biofuels expansion in the state when physical and economic models are jointly applied. Therefore, any ethanol scenario under a carbon pricing initiative would turn into a high-impact development option for Goiás, showing much higher environmental impacts when compared to non-carbon-pricing scenarios and the long-term environmental impacts would offset any economic gains. This significant difference between the results of a physical approach and a price approach is an important way of assessing environmental impacts in terms of their economic implications, and a means of aligning both results and policy recommendations more closely to reality. Additionally, the impacts on the return of a sector’s value-add show that no Goiás’ economic sector would be significantly impacted in carbon price scenarios up to US$10/tCO₂ₑ, except for the 𝘈𝘨𝘳𝘪𝘤𝘶𝘭𝘵𝘶𝘳𝘢𝘭 sector; this would face huge challenges even under 45% and 35% emissions reduction scenarios, with impacts of 17% and 20% in value-added terms, respectively. Finally, the unintended impacts of expanding biofuels, such as the possibility of indirect deforestation and its related GHG emissions, must always be considered before promoting sugarcane expansion in the Paranaíba basin. Therefore, the WEFN analysis is a valuable tool for guiding the sustainable management of natural resources, including water, energy, land use and GHG emissions. In particular, the hybrid extended IO-WEFN framework is useful for designing effective biofuel policies and collectively addressing impacts on environmental, social and economic spheres, in a local or broader context.
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