Fuel Versus Food

Many Countries have actively encouraged the production of biofuels as a low-carbon alternative to the use of fossil fuels in transportation. To what extent do these trends imply a reallocation of scarce land away from food to fuel production? This paper critically reviews the small but growing literature in this area. We find that an increase in biofuel production may have a significant effect on food prices and, in certain parts of the world, in speeding up deforestation through land conversion. However, more research needs to be done to examine the effect of newer generation biofuel technologies that are less land intensive as well as the effect of environmental regulation and trade policies on land-use patterns.