How Biofuels Benefit the Economy - Research Paper Example

al Affiliation: Due: How Biofuels benefit the Economy Introduction Biofuel is a fuel type whose energy is sourced from biological fixation of carbon. It includes the fuels derived from conversion of biogas and solid biomass. Biofuels have gained scientific as well as public attention because there have been oil price increases and there acute need of energy substitute. In this regard, the concern for greenhouse gas emissions has attracted the concern of the governments in helping the citizens to achieve a new way of survival that is cost effective. Production of biofuel is an advantage to the economy because it helps the economy in different aspects (Environmental and Water Resources Institute U.S. 3). It is a cleaner source of energy compared to the other sources for instance the petroleum sources. This indicates that the environmental concerns are taken care of and the health of individuals is not at risk. Many people spend a lot of their income by paying for their health facilities but, with the use of biofuels, one is able to save the amount of money he or she earns. The saved funds can be channeled to other uses among them investment, a situation that would have otherwise not occurred. Health care provisions to cater for complexities that result from forms of energy used are expensive. On the same note, meeting health care insurance premiums may prove difficult because the insurance firms often deny covers to people with pre-existing conditions. Making the right choices of energy; in this case biofuels rules out such occurrences. When compared to other conventional sources of energy, biofuels are the best because they offer cleaner gases than the rest (Yeo 52). The economic benefits of biofuels fall into two categories. They are the benefits which outsmart the fuel production by fossil fuels and the economic benefits that establish a viable and sustainable biofuels industry which uplifts the developing countries (Worldwatch Institute 132). Whichever the case, the benefits of biofuels in the economy cannot be refuted. It is important to note that challenges and opposition have been raised against the use if this type of fuel. However, the central point of argument revolves around what biofuels will do for the economy. The economy is not a stand-alone aspect in the context of this analysis. Both social and environmental aspects fall into place in the evaluation of the benefits of biofuels. The government also must be accounted for, given the fact that it plays a central role in determining the pace of economic growth and development. All these factors are therefore intertwined, and the benefits of biofuels to the economy are felt across all the aspects identified. Energy security for countries like the United States which uses a lot of energy annually is safe from expensive purchase of oil as an energy source from other foreign companies. This is because reliance on imports makes the country suffer a great deal of its income by purchasing a commodity they can produce, given the resources available in the country. The economy of the country hence preserved for taking care of other concerns in the country (Keystone BioFuels Inc.). What this means for an economy that uses biofuels is that, domestic capacity utilization is maximized, thereby triggering high economic performance. Resource allocation to the energy sector is undercut, allowing for increased allocations to other sectors of the economy that previously received lesser allocations in a bid to finance fuel importation. First generation biofuels save up to sixty percent of carbon emissions, which are a, risk to the environment and health art large. The second generation biofuels save up to eighty percent of carbon emissions, which reduces the, health risks by a great percentage. Economy benefits greatly from the biofuels because they create an expansion of more job opportunities (Environmental and Water Resources Institute U.S. 3). Due to this technological advancement country has wanted to have experts who will fix the systems for generating the biofuels in place (Keystone BioFuels Inc.). This infrastructure created job opportunities and, it is still creating opportunities for citizens in different countries. In the third world countries, there have been over-reliance on biofuels which make the activities in the rural areas operational (Yeo 50). This reliance on biofuels makes development in the rural areas be active and help the inhabitants of the regions to acquire almost the same living conditions as those people in the cities. Biodiesel is a safer fuel which has a high flash point so that in case of an accident, it does not burn more after an accident. Many of businesses are consumed by fires because other energy sources have high flash points in that if fires happen they become inflammable and cause losses to the owners. The biodiesels are renewable and reduces overreliance on fossil oil sources (Yeo 53). By the year 2012, there will be more than 123,000 jobs created by the advanced biofuel production. With the same rate, almost one million job opportunities will be created by 2016. Forty six percent of jobs created will be primarily on agriculture while thirty five percent will be on construction, procurement and engineering. There are some positive aspects in which biofuels are of great importance to the developing and the developed countries (Worldwatch Institute 133). Production of biofuels helps in job creation in the small holder farmers. This will help them in acquiring income to manage their daily incomes. In Brazil, sugarcane farming is directly relating in production of bioethanol. This sector employs about one million workers and this number will increase as the government supports the projects (Yeo 52). In china, programs on liquid biofuel are predicted to create more than 9.26 million jobs in the country which will help in income generation for the rural areas, as well as the country at large. Biofuels are significant in ensuring that countries reach their intended goals by achieving their economic stimulus within the confines of healthy workings. In this process, the health of the workers is a resource which needs to be maintained and checked regularly so that they will be able to produce more in the future. Fuel security in developing countries is a coined benefit to the national economic benefits because the rural dwellers do not use a lot of money to acquire fuel. This helps them to advance in their income generating activities which supports even the national economy (Yeo 54). There are lower costs incurred for discovery of biofuels, unlike the fossils fuels. There are fewer risks incurred during the survey because, in the fossil oils, people die during test excavations while in the biofuels it is hard for one to incur health problems. Processing biofuels is cheaper than processing fossil fuels hence saving on fuel production. There is ease in extraction of oil in biofuels but, it is the opposite in extraction of fossil fuels. Refining biofuels costs lower than refining fossil fuels (Alternative Fuels Americas). Adverse economic effects brought about by increased fuel costs makes countries to have economic consequences because they do not know how to manage the increased cost production in fuels. With biofuels, the cost effective strategies are put in place so that there is reduced cost of transportation incurred by purchasing of oil. Trade deficits brought about by increased oil prices are eliminated by the fact that. Development of domestic capacity helps the countries to benefit from agricultural activities, which provide biofuels. Although there is a possible clash over energy production crops and food crops, the government advises its citizens accordingly so that the price of food may not rise due to less production of food crops (Alternative Fuels Americas). Job creation is another perspective from which we view biofuels. The same way farmers benefit from selling their food crops is the same way farmers benefit when they sell energy crops. This helps farmers to have a steady income which sustains their households. Ministry of Agriculture in Honduras, for example, reported that national biodiesel program created more than 300,000 jobs in the poorest rural areas. Biofuel production helps in utilizing all the land. This is because some crops that produce biofuel for instance Jatropha grows on marginal lands. By utilizing both the productive and the marginal lands helps in production of commercial crops, in the lands (Alternative Fuels Americas). For any given economy, employment is a positive indicator of economic growth and development. Use of biofuels have and will continue creating more jobs in the economies that adopt it. Increase in employment levels leads to an overall growth of the labor force in use. This way, unemployment is curbed. With reduced levels of unemployment, dependency ratio will automatically go down, meaning that poverty level will reduce at the same time. The end result of this process is a general rise in the welfare of the society characterized by a well performing economy. When marginal lands are utilized an all-round maximization of available land is embraced hence making opportunities in the whole region. Biofuel farming attracts foreign investors hence improving the economy because the foreigners come with new farming skills that locals use in their business skills. This integration brings forth prosperity. With the foreign investors’ funds will be available to maximize the opportunities present in the agricultural sector (Keystone BioFuels Inc.). This will be done by discovery of new farming techniques which purpose to refine the approach of livestock farming due to availability of feedstock. Low cost cultivation of feedstock for markets in biodiesel will help in discovery of new technologies, which refine the, traditional farming methods. This would increase the yields of the agricultural sector not only in the biodiesel sector but in the whole agricultural sector (Alternative Fuels Americas). Works cited Alternative Fuels Americas. The economic benefits of biofuels. 2011. Retrieved on 17th November, 2011 Courtenay, Stevens. et al. Measuring the government sector of the U.S. economic accounts. Chicago: National Academies Press, 2008. Environmental and Water Resources Institute (U.S.). Bioenergy and Biofuel Task Committee. Bioenergy and Biofuel from Biowastes and Biomass. Reston, Virginia: ASCE Publications, 2010. Print Great Britain: Parliament: House of Commons: Environmental Audit Committee and Yeo, Tim. Are biofuels sustainable? First report of session 2007-08, Vol. 2: Oral and written evidence. London: The Stationery Office, 2008. Print. Harlan, Messer. Understanding economics. New York: M.E. Sharpe, 1999. Keystone BioFuels Inc. Benefits of Biodiesel. 2011. Retrieved on 17th November, 2011 Worldwatch Institute. Biofuels for transport: global potential and implications for sustainable energy and agriculture. London: Earthscan, 2007. Print. Wildavsky, Allan. et al. The Federal budget: economics and politics. New York: Transaction Publishers, 2009. Read More