Moving toward renewables

Somewhat analogous to the corn industry in the U.S., which has shifted about 40 percent of its output to ethanol production in recent years, policymakers in India – many of whom benefit financially from the sugar industry – are currently exploring how to use sugarcane to increase energy independence and shift toward renewable energy use.

The Indian government has set a goal to increase the ethanol-to-gasoline blending rate from its current rate of about 6 percent to 20 percent by 2030 and introduced several policies to promote production of ethanol from sugarcane. The increased blending rate is a “desirable goal for improved energy security,” the researchers write. However, its effects on human health and the environment will largely depend on which sugar product ends up being the main feedstock: juice extracted from crushed sugarcane, or molasses, a by-product from sugar processing.

India’s national policy on biofuels only recently began allowing use of sugarcane juice in ethanol production, in addition to molasses.

“If the energy industry continues to use molasses as the bioethanol feedstock to meet its target, it would require additional water and land resources and result in the production of extra sugar,” said co-author Anjuli Jain Figueroa, a postdoctoral researcher in Earth system science. “In contrast, if the industry used the sugarcane juice to produce ethanol, the target could be met without requiring additional water and land beyond current levels.”

Using sugarcane juice to create ethanol could also help alleviate government spending to subsidize sugar and sell it below cost in its public distribution system.

Entrenched incentives

The public distribution system of sugar in India dates to the 1950s, when frequent famines plagued the country. Back then, sugar helped to meet basic calorie requirements. But today – with micronutrient deficiency leading to illness, disabilities and even death – the Indian government is more concerned with nutrition.

“In India right now, even poor populations have met their basic calorie needs,” said Naylor, who is also a senior fellow at the Stanford Woods Institute for the Environment. “They have been able to buy sugar at subsidized prices, but meanwhile they don’t have access to adequate protein and micronutrients for cognitive growth and for physical well-being.”

Sugarcane cultivation in India has expanded in part because of policies that incentivize production, including a minimum price, guaranteed sales of sugarcane and public distribution of sugar. These regulations have become entrenched over many generations, making the crop highly profitable to the 6 million farmers in the country, but the empty-calorie crop reduces the amount of resources available for micronutrient-rich foods. 

“Using scarce natural resources to produce a crop that doesn’t fulfill nutritional needs for the second most populated country in the world can place pressure on the global food system if more and more food imports are required to meet the rising demand in India,” Naylor said.

Balancing act

The researchers focused their analysis on Maharashtra in western India, one of the country’s largest sugarcane-producing states. Sugarcane cultivation in Maharashtra has increased sevenfold in the past 50 years to become the dominant user of irrigation water. The study found that in 2010-11, sugarcane occupied only 4 percent of Maharashtra’s total cropped areas but used 61 percent of the state’s irrigation water. Meanwhile, irrigation for other nutritious food crops remained lower than the national averages.

“Irrigation of sugarcane in our study region is about four times that of all other crops and has doubled from 2000 to 2010. This resulted in about a 50 percent reduction of river flow over that period,” said co-author Steven Gorelick, the Cyrus Fisher Tolman Professor at Stanford Earth. “Given that this region is susceptible to significant drought, future water management is likely to be quite challenging.”

As part of continued efforts to examine the Indian sugar industry and its impacts, lead author Ju Young Lee, a PhD student in Earth system science, also developed satellite imagery analyses to identify sugarcane from space.

“Despite the importance of sugarcane in the water, food and energy sectors in India, there are no reliable sugarcane maps for recent years and in time series,” Lee said. “Using remote sensing data, I am developing current time-series sugarcane maps in Maharashtra – an important step forward.”

 

The researchers worked with stakeholders in India, including NGOs, academics and government officials, to focus the goals of the project. The research is part of Food Water Energy for Urban Sustainable Environments (FUSE), an international consortium supported in part by the National Science Foundation through the Belmont Forum to address competition for scarce resources in stressed urban food-water-energy systems – including the impacts of climate variability.

Naylor is also a senior fellow at the Freeman Spogli Institute for International Studies and a professor, by courtesy, of economics. Gorelick is also lead principal investigator of FUSE and a senior fellow at the Stanford Woods Institute for the Environment.

The research was supported by the U.S. National Science Foundation.

The Stanford Center at Peking University (SCPKU), the Center on Democracy, Development and the Rule of Law (CDDRL), and the APARC China Program jointly hosted a workshop on China’s Belt and Road Initiative (BRI) in early March. The workshop, held on March 2 and 3, welcomed researchers from around the world with expertise in the Initiative. Unfortunately, because of the rapidly developing health emergency related to the coronavirus, participants from not only China, but also Japan, were prevented from attending. As described by Professor Jean Oi, founding director of SCPKU and the China Program, and Professor Francis Fukuyama, director of CDDRL and the Ford Dorsey Master's in International Policy, who co-chaired the workshop, the meeting aimed to provide a global perspective on the BRI, consolidate knowledge on this opaque topic, and determine the best method and resources for future research.  

The workshop began with presentations from several of the invited guests. Dr. Atif Ansar from the University of Oxford’s Saïd Business School kicked off the first day by describing not only the tremendous opportunity that the BRI presents to developing economies, but also the serious pitfalls that often accompany colossal infrastructure projects. Pointing out the poor returns on investment of mega infrastructure projects, Ansar examined the frequest cost and schedule overruns, random disasters, and environmental degradation that outweigh the minimal benefits that they generally yield. China’s own track record from domestic infrastructure projects does little to mitigate fear of these risks, Ansar claimed. In response, he urged professional management of BRI investments, institutional reforms, and intensified deployment of technology in BRI projects. Dr. Ansar was followed by Dr. Xue Gong of the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. Dr. Gong’s analysis centered on the extent to which China’s geopolitical motivations influenced its outward foreign direct investments (OFDI). Although her research was still in the early stages, her empirical analysis of China’s OFDI inflows into fifty BRI recipient countries from 2007-2018 nevertheless revealed that geopolitical factors often outweigh economic factors when it comes to China’s OFDI destinations.

Participants then heard presentations from Amit Bhandari of Gateway House: Indian Council on Global Relations and Professor Cheng-Chwee Kuik of the National University of Malaysia. Mr. Bhandari’s talk focused on Chinese investments in India’s six neighboring countries, which tend to center more on energy rather than connectivity projects. He first found that the investments are generally not economical for the host countries because they come with high costs and high interest rates. Secondly, he argued that these projects often lacked a clear economic rationale, appearing instead to embed a geopolitical logic not always friendly to India. Professor Kuik, by contrast, provided a counterexample in his analysis of BRI projects in Southeast Asia. He described how, in Southeast Asia, host countries’ reception of the BRI has varied substantially; and how various stakeholders, including states, sub-states and other entities, have used their leverage to shape outcomes more or less favorable to themselves. Kuik’s analysis injected complexity into the often black-and-white characterizations of the BRI. He highlighted the multidimensional dynamics that play out among local and state-level players in pursuit of their goals, and in the process of BRI implementation.

Professor Curtis J. Milhaupt and Scholar-in-Residence Jeffrey Ball, both at Stanford Law School, followed with individual presentations on the role of State-Owned Enterprises (SOEs) in the BRI and the emissions impact of the BRI on climate change, respectively. Professor Milhaupt  characterized Chinese SOEs as both geopolitical and commercial actors, simultaneously charged with implementing Party policies and attaining corporate profits. Chinese SOEs are major undertakers of significant overseas BRI projects, acting not only as builders but also as investors, partners, and operators. This situation, Milhaupt asserted, carries significant risks for SOEs because these megaprojects often provide dismal returns, have high default rates, and can trigger political backlash in their localities. Milhaupt highlighted the importance of gathering firm-level data on businesses actually engaged in BRI projects to better infer geostrategic, financial, or other motivations. Jeffrey Ball turned the discussion to carbon emissions from BRI projects and presented preliminary findings from his four-country case studies. He concluded that, on aggregate, the emissions impact of the BRI is still “more brown than green.” Twenty-eight percent of global carbon emissions may be accounted for by BRI projects, Ball asserted, underscoring the importance of the BRI to the future of global climate change.

The day concluded with presentations by  Michael Bennon, Managing Director at the Stanford Global Projects Center, and Professor David M. Lampton, Oksenberg-Rohlen Fellow at the Freeman Spogli Institute for International Studies. Bennon first presented findings from two empirical case studies of BRI projects and then went on to describe how the BRI is now practically the “only game in town” for infrastructure funding for developing countries. Lengthy environmental review processes at Western multilateral banks have turned the World Bank, for example, from a lending bank into a “knowledge bank,” he argued. He also highlighted that, in general, economic returns on BRI projects for China are very poor, even though recipient countries may accrue macroeconomic benefits from these projects. Finally, Professor Lampton turned the discussion back to Southeast Asia, where China is currently undertaking massive cross-border high-speed rail projects through eight ASEAN countries. He described how each host country had varying capacity to negotiate against its giant neighbor, and how the sequential implementation of these cross-border rail projects also had varying impacts on the negotiating positions of these host countries. BRI played out differently in each country, in other words, eliciting different reactions, push-backs and negotiated terms.

The second day of the workshop was dedicated to working toward a collaborative approach to future BRI research. The group discussed the key gaps in the existing research, including how to know what China’s true intentions are, how to measure those intentions, who the main players and their interests in both China and the host countries are, and even what the BRI is, exactly. Some cautioned that high-profile projects may not be representative of the whole. Participants brainstormed about existing and future sources of data, and stressed the importance of diversifying studies and seeking empirical evidence.