Food Security, Energy Security, and Inclusive Growth in India. Herath Gunatilake

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       Food Security, Energy Security, and Inclusive Growth in India

       The Role of Biofuels

      Herath Gunatilake

      Asian Development Bank

      © 2011 Asian Development Bank

      All rights reserved. Published 2011.

      Printed in the Philippines.

      ISBN 978-92-9092-315-2

      Publication Stock No. RPT113105

      Cataloging-In-Publication Data

      Gunatilake, Herath.

      Food security, energy security, and inclusive growth in India: The role of biofuels.

      Mandaluyong City, Philippines: Asian Development Bank, 2011.

      1. Biofuels. 2. Food security. 3. Energy security. 4. Inclusive growth. 5. India. I. Asian Development Bank.

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      The fiscal year of the Government of India ends on 31 March. In this report, FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2008 ends on March 2008.

      Foreword

      Promotion of renewable energy and energy efficiency is one of five pillars of the Asian Development Bank’s (ADB’s) energy policy. The South Asia Department of ADB has prioritized its support for renewable energy projects in its developing member countries. It has been actively seeking opportunities to broaden its assistance for renewable energy in many sectors to (i) ease growth in fossil fuel demand and upward pressure on energy prices, (ii) improve energy security, and (iii) reduce emissions of greenhouse gases. Biofuels are a renewable source of energy which could help achieve these objectives. The first-generation biofuels, however, compete for agricultural resources and therefore cautious approaches are needed in promoting biofuels.

      This publication is an outcome of the ADB technical assistance (TA) project Cross-Sectoral Implications of Biofuel Production and Use in India. The objective of this TA project was to generate scientific information on biofuels to help implementation of the biofuel policy in India. This TA project included a series of studies using rigorous analytical tools, following a consultative and transparent process. The TA project report provides balanced and carefully drawn conclusions and a set of pragmatic recommendations to move the Indian biofuels sector forward. The Government of India has shown keen interest in this study and we hope that the government will consider the report’s recommendations in formulating policies to achieve greater energy security, inclusive growth, and carbon emission reduction while taking necessary supplementary measures to avoid adverse impacts, if any, on the food sector.

      This TA project was undertaken with limited resources, but produced a very valuable set of recommendations which will help India to develop a biodiesel industry to substitute diesel imports of about Rs650 billion per annum, while generating an estimated 18 million rural jobs. The TA project also generated a series of knowledge products on a new subject which has drawn serious attention from academics and policy makers.

      I congratulate Herath Gunatilake, principal energy economist, Energy Division, South Asia Department, and his team for designing and carrying out these challenging studies on a new subject of major relevance to public policy.

      Sultan Hafeez Rahman Director General, South Asia Department

      Acknowledgments

      This ADB publication is a product of the ADB technical assistance (TA) project Cross Sectoral Implications of Biofuel Production and Use in India. The studies under the TA project were undertaken in consultation with a steering committee consisting of 10 line ministries. An oversight committee consisting of four eminent scientists and economists guided the study team to ensure rigorous analysis and high-quality outputs.

      The study team was lead by Herath Gunatilake (principal energy economist, Energy Division, South Asia Department) and the study concept was initially developed by Priynantha Wijayathunga (senior energy specialist, Energy Division, South Asia Department). The computable general equilibrium modeling studies ware undertaken in collaboration with the Economics and Research Department of ADB. Guntur Sugiarto (senior economist, Economics and Research Department) collaborated from this side.

      The studies were carried out by a team of consultants under the overall supervision of Gunatilake. The consultant team includes, David Rolan-Holst (University of California, Berkeley), Piya Abeygunawrdena (Texas A&M University), Sanjb Prohit (National Institute of Science, Technology and Development Studies), Jai Uppal, Ronnie Khanna, Thilottam Kolanu, and Jitendra Swami.

      The Steering Committee includes H.L. Sharma (director, Ministry of New and Renewable Energy), Rajan Sehgal (senior assistant inspector general of forests, Ministry of Environment and Forests), Neetu Kejriwal (deputy secretary, Ministry of Rural Development), Rashmi Agarwal (director, Ministry of Petroleum and Natural Gas), S. Biswas (adviser, Ministry of Science and Technology), Alok Adholeya (director, Biotechnology and Bioresources Division, Energy and Resources Institute), Renu Swaroop (adviser, Ministry of Science and Technology, Department of Biotechnology), R.S. Kureel (director, Ministry of Agriculture), Ravinder Gaur (scientist, Ministry of Science and Technology), and Malay Srivastava (director, Ministry of Power). The study team appreciates the inputs from steering committee members at various stages of the study.

      The Oversight Committee consists of David Zilberman (University of California, Berkeley), M.N. Mutry (Indira Ghandi Institute of Economic Growth, Delhi), Geetha Bali (vice chancellor, Karnataka State Women’s University), and Vinay Shankar (former secretary, Ministry of Rural Development, India). The study team is thankful to the oversight committee members for their valuable inputs.

      The Department of Economic Affairs in the Ministry of Finance served as the executing agency for the TA project. The study team is grateful to Anoop K. Pujari for his guidance at the conceptualization stage of the study. Anuradha Thakur, director of the Department of Economic Affairs, coordinated the study and her unending support and keen interest are highly appreciated.

      Cha Santos provided editorial assistance and Meng Roque provided TA project implementation assistance. Their excellent support made it possible