Indirect Land Use Changes

Indirect Land Use Changes (ILUC) are conversions from one land use type into another (such as from forest to cropland) that are caused by changes in the production level of an agricultural commodity in another, often far away location. They are cloesly related to leakage effects. ILUC gained attention both in scientific research and in public discussions due to concerns that crop based biofuels might accelerate deforestation in the tropics. This could diminish or offset the benefits of a reduced consumption of fossil fuels.


While there is scientific consensus about the existence of ILUC effects, their quantification is still challenging. Differences between model estimates and the uncertainties involved in the ILUC factors derived from them complicates the consideration of ILUC in politics. Due to these uncertainties, inclusion of ILUC factors in assessments of bioenergy crops has received strong criticism from interest groups but also from within the scientific community. However, ignoring ILUC effects will underestimate the potential for environmental damages and might even result in perverse outcomes of environmental policies.


The term Indirect Land Use Changes (ILUC) refers to changes in the production level of an agricultural commodity that cause land use changes in another, often far away location (IPCC, 2014). Land use changes in this context are conversions from one of the six IPCC land use categories into another (Forest land, Cropland, Grassland, Wetlands, Settlements, Other lands), usually from forest land to grassland or from forest land or grassland to cropland (IPCC 2006). ILUC gained attention both in scientific research and in public discussions with regard to potential effects of crop based biofuels. Searchinger et al. (2008) argued that American biofuel production have a net negative effect on the global climate because they trigger deforestation in the tropics and thereby cause greenhouse gas emissions that outweigh any  savings from the reduced reliance on fossil fuels.


The introduction of biofuels and the policy support they received in industrialized countries resulted in changes that re-distributed a share of the global harvest towards this novel purpose (Searchinger et al., 2008). If a large area of cropland is no longer used to produce a specific commodity, then this affects the relationship between supply and demand for this commodity and increases the commodity’s price. Higher prices in turn motivate conversion of other land use types (often forest or savannah) into cropland to produce this commodity (Ahlgren & Di Lucia, 2014; Villoria & Hertel, 2011, Wicke et al., 2012). Because many agricultural goods are traded internationally, land use changes can occur in other world regions, with global markets creating a tele-connection (Yu et al., 2013).


However, ILUC can also occur non market-mediated in the form of a competition for land resources. For example, the conversion of rangeland into cropland to produce biofuels (direct land use change) can cause a migration of cattle herders to other locations where they clear forests to create new rangeland (indirect land use change) (Lapola et al., 2010). 


Indirect land use changes can have a significant impact on the economic, social and environmental dimensions of sustainability (Ahlgren & Di Lucia, 2014). Within the policy arena, awareness of the problem of ILUC due to biofuel production and of the greenhouse gas emissions resulting from ILUC is well-established. In the US, ILUC accounting was incorporated into the federal Renewable Fuel Standard in 2007 and into California’s Low-Carbon Fuel Standard in 2009 (Breetz 2017). In 2015, the ILUC calculations for the Low-Carbon Fuel Standard were revised (Leland et al., 2018). In Europe, Directive 2015/1513 was passed in 2015 to account for ILUC effects from bioenergy and biofuels. The directive includes provisional values for greenhouse gas emission from ILUC for three feedstock groups and amends the Renewable Energy Directive (2009/28/EC) and the Fuels Directive (98/70/EC).

 
While there is scientific consensus on the existence of ILUC effects, their quantification is very challenging with various modelling approaches resulting in very different ILUC factors (Finkbeiner, 2014). This is not only due to technical difficulties, but also a result of conceptual differences (Flysjö et al., 2012). The resulting uncertainties make it difficult to consider ILUC in politics, where precise estimates of ILUC factors are sought for (Ahlgren & Di Lucia, 2014). Uncertainties are the basis for strong criticism from interest groups but also from within the scientific community (Finkbeiner, 2014).

The transformation from a fossil fuel based economy to a bioeconomy that is based on renewable resources, a policy target in countries such as Germany, creates additional demand for agricultural commodities. While crop choices of individual farmers may not seem relevant for global land use, the sum of management decisions taken at farm level determines national production, affects the balance between supply and demand and contributes to the formation of global prices. Indirect land use changes are likely to occur if domestic food production is reduced while domestic demand remains unchanged. Where the gap between production and demand increases, prices increase as well and motivate conversion of new areas into farmland. Conversely, where the gap between production and  demand is reduced, prices drop and motivate extensification and land abandonment. In this regard, indirect land use changes also depend on the degree by which productivity is increased through agricultural intensification.

 

Land conversions, in particular conversion of forests and grasslands into cropland, incur massive ecological costs. This also includes multiple soil related ecosystem services, such as ability of soils to provide habitats or to provide climate regulation services (Haines-Young & Potschin, 2018). This is particularly relevant because soils represent the biggest terrestrial pool of organic carbon on earth and therefore play a substantial role in the global carbon cycle (Ciais et al., 2013). Global land use change has a considerable effect on that cycle by changing accumulation rate and turnover of carbon in soils, vegetation biomass and soil erosion (Deng et al., 2014).

 

Considering ILUC effects is highly relevant for soil related impact assessments and ignoring them could result in a false assessment of the overall sustainability of policies or practices. An example are first-generation biofuels which were originally regarded as a practical, technical solution for climate change mitigation. The consideration of ILUC effects, however, caused less favorable assessment results in a number of studies due to concerns about additional greenhouse gas emissions from deforestation and implications for global biodiversity (Searchinger et al., 2008; Di Lucia et al., 2012; Bentivoglio & Racetti, 2015). 

One major obstacle to considering ILUC is that they can not be directly observed. Multiple factors influence global rates of land use change and in particular conversion rates of tropical forests into farmland. Commodity prices play an important role, but many other factors such as land rights, population pressure, legislation or law enforcement are equally important. It is therefore very difficult to define what share of observed land uses changes is caused by price changes in global markets.  This also complicates communication with stakeholders. For example, farmers in Europe who change from food crop production to energy crop production can not observe indirect effects of their actions and if land use change occurs somewhere else in the world, their contribution to this can not be proven (Ahlgren & Di Lucia, 2014).  

 

ILUC effects can be assessed qualitatively or quantitatively. Qualitative assessments can be expert-based and could result in an assessment of whether or not a specific policy or management option is likely to cause ILUC or an assessment of which options is likely to cause the highest amount of ILUC. Quantitative assessments can only be generated by models, with various modelling approaches resulting in very different ILUC factors (Finkbeiner, 2014). This is not only due to technical difficulties, but also a result of different concepts. The challenges of including ILUC effects into assessments is demonstrated by Flysjö et al. (2012). For a life cycle assessment of organic and conventional dairy farms, these authors included estimates of greenhouse gas emissions from land use changes caused by the import of soy meal. Estimates were based on different concepts for land use change:

 

• A: All use of agricultural land contributes equally to deforestation and expansion of farmland

• B: Use of agricultural land contributes to deforestation and expansion of farmland

• C: Only specific crops (such as soy) are responsible for deforestation and expansion of farmland

 

They found that the Iand use change emissions dominated their resluts and that depending on the concept behind the estimates, either conventional or organic systems performed better. An overview of different ILUC model types and examples for their application is provided by Schmidt et al. (2015). Most these models currently focus on greenhouse gas emissions. 

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Searchinger T, Heimlich R, Houghton R A, Dong F, Elobeid A, Fabiosa J, Tokgoz S, Hayes D, Yu TH. 2008. Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change. Science, 319 ( 5867),  1238–1240. DOI:10.1126/science.1151861

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Wicke B, Verweij P, Van Meijl H, Van Vuuren D P, Faaij A P C. 2012. Indirect land use change:review of existing models and strategies for mitigation. Biofuels 3(1), 87–100.

 

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