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7
FAO/UNEP/UN-Energy Bioenergy Decision Support Tool -
MODULE 2: Designing a Strategy
IDENTIFYING CROSS-SECTOR LINKAGES
Based on the objectives, the next stage is to consider how
cross-sector linkages and policies impact these objectives. For
example, forests can be managed based on rural development
needs or as carbon sinks or as sources of bioenergy. Although
it is not possible to optimise all such purposes simultaneously,
there are ways of pursuing the objectives in an integrated manner;
integrating objectives in the strategy will often require reference to
particular applications
<Which?>
,
specifc feedstocks
<What?>
,
and modes of implementation
<How?>
.
Another example relates to the choice of application for liquid
biofuels; if produced for transport markets, they primarily address
energy security, whereas liquid biofuels could be used for off-grid
electricity production or household cooking to improve energy
access. By choosing feedstocks and technologies appropriately,
it may in fact be possible to address both objectives in a more
fexible manner. At this stage, it is not necessary or appropriate
to conduct detailed analysis on the many different possible
combinations of applications and objectives; it is suffcient to
identify
and fag these linkages so that they can be referenced
later as the strategy development process progresses.
EVALUATING EXTERNAL DRIVERS
A bioenergy strategy that is robust depends largely on how well
it can evolve or adapt in response to external drivers over which
national or regional policy-makers have little or no control. In
contrast to the larger developing countries, the smaller and/or
Least Developed Countries will have less control over the many
external economic and political factors that affect their energy
portfolio. Consequently, external drivers must be incorporated into
the design of a bioenergy strategy in order for that strategy to be
realistic and to make the strategy fexible to changing conditions.
In general, at this stage of the strategy design, it is suffcient to
demonstrate the impacts of the external drivers on the objectives;
a detailed analysis would have to be conducted once specifc
bioenergy plans are established.
Dependence on imported energy and related issues with respect
to the trade balance and the energy portfolio are one set of
external drivers requiring further analysis to qualify the policy
objectives. The nature of this dependence can vary considerably
and a number of factors might be considered:
• Dependence on various energy imports vs. dependence only
on oil imports;
• One trading partner or many, in terms of future options as well
as current conditions;
• Terms of trade and the time period for which they are fxed or
specifed;
• Food imports and other agricultural imports;
• Diversifcation of export markets; and,
• Payments in domestic vs. foreign currency.
For those countries that rely upon signifcant external funding from
development partners, the requirements associated with those
funding sources and agencies may be important. For example,
there may be frameworks and incentives for choosing low-carbon
energy options, and these might affect the priority attached
to policy objectives. Donor preferences should not provide a
rationale for modifying the objectives, which have to be based on
national and regional goals, but it is opportune to consider the
implications of donor guidelines for prioritising the objectives. For
example, an emphasis on bioenergy for energy security objectives
might impact the contribution of bioenergy to climate goals
and therefore any national climate commitments may require
adjustments in other energy sector options.
Climate vulnerability
is increasingly a consideration for all
developing countries, especially those that are vulnerable
to drought, sea-level rise and natural resource pressures. A
strategy that envisions bioenergy as a major contributor to
climate mitigation must also recognise that agro-based energy
is vulnerable to climate impacts and thus a balanced portfolio is
needed from both energy and climate perspectives. At the same
time, increased energy access and modernisation of energy
options can improve adaptive capacity and thereby reduce vulner-
ability to climate impacts. Establishing energy policy objectives
has become a process closely intertwined with the climate policy
process.
REGIONAL AND INTERNATIONAL LINKAGES
National policy objectives have to be reconciled with regional
and international policies and institutions; they can be facilitated
or hindered, depending on factors such as the openness of the
national economy and the level of commitment of the national
government to regional and international bodies, treaties and
organisations. International Treaties, particularly those for Climate
and Biodiversity, entail commitments that could be affected by
the bioenergy strategy. By identifying conficts and synergies at
an early stage in the strategy process, the bioenergy priorities can
be steered in a more constructive direction. With respect to the
external drivers discussed previously, regional bodies sometimes
address policy objectives at a higher level of coordination, which
can be more effective. In the European Union, for example,
member states coordinate closely on energy security and climate
issues, thereby creating better options for exploiting bioenergy
options that are valued at both national and regional levels.
A similar approach can be considered for trade in biofuels; a
regional strategy is almost always more effective than having
many different national strategies.
INCORPORATING LOCAL NEEDS
Policy objectives must also be viewed through the lens of the
villages and localities that will produce and use bioenergy. At
the village level, bioenergy has the advantages of ftting relatively
easily into existing infrastructure and technology, relating to
rural expertise and experience. In comparison with off-grid
options such as PV and wind, the equivalent scale of bioenergy
requires lower upfront investment and can be stored and used
on demand. The largest cost factor—feedstocks—are produced
locally, with revenues beneftting the local community. Other
off-grid options have low (or zero) running costs and high
effciency, but at the expense of higher upfront capital costs. The
poor are extremely sensitive to upfront costs and thus bioenergy
options are often preferable even if other renewables appear
cost-effective based on typical interest rates used in mature
market economies. The proper incorporation of local needs and
constraints could also facilitate more appropriate and effective
foreign direct investment by leveraging FDI with high-value local
knowledge and resources.
It is thus important to look not only at the physical resource base
in designing a bioenergy strategy, but also to consider and utilize
local knowledge. Energy solutions should match local needs
and there is often potential for local bioenergy production that
can be utilized without prohibitive investments. A number of
oil-based crops can be grown independently or together with
other crops and landscapes in the form of integrated systems that
improves economic competitiveness. Cascading use of integrated