Dimitris Diakosavvas | Senior Economist, OECD

Dimitris Diakosavvas is Senior Economist at the Agricultural and Natural Resources Division of the OECD Trade and Agriculture Directorate. In the first part of his interview to IAMO, he speaks of the opportunities and risks associated with the transition to the bioeconomy, as well as of the role of policies in this process.

Bioeconomy is believed to become a key to sustainable development of agri-food systems and to help address global challenges such as food security and climate change. In your opinion, what are the main prerequisites for a successful transition to bioeconomy?

There are high expectations about the potential benefits and opportunities for the agriculture and food system associated with transitioning to a bioeconomy. This is critical because of its potential role to address three interconnected issues: ensuring sustainable resource use, meeting the growing demand for both food and energy, and decoupling economic growth from environmental degradation.

But transitioning to a bioeconomy is complex as it includes diverse sectors and stakeholders, is related to far-reaching changes in production systems and consumption patterns and involves trade-offs. Essential to the growth of the bioeconomy are technologies (e.g., systems to reduce polluting emissions), organisations (e.g., changes in institutional organisation and behaviour), social aspects (e.g., job creation), and policy innovations. Crucially, the transition to a bioeconomy is a multi-level governance challenge where actions need to be taken at the appropriate level (international, national, regional, local authority, private sector, citizen). Thus, a first step is to identify priority areas for action at different governance levels. A successful transition to a bioeconomy requires an enabling policy framework with close cooperation and coordination between business, policy makers, civil society, and scientists at national and international levels.

What are the major challenges and potential risks on the way toward bioeconomy?

While there is great optimism about the benefits and opportunities for the agri-food sector associated with a growing bioeconomy, potential challenges might arise if policies are developed and implemented in a partial and non-coherent way. The main challenges include competition between food supply and biomass production, over-exploitation of natural resources and loss of biodiversity, encouraging models of agri-food systems appropriate to the diversity of situations in different countries, trade-offs between short and long-run actions, and maintaining consumer and public trust. Mitigating these risks requires robust evidence: a good knowledge of the interactions and trade-offs, measurable integrated assessments and monitoring, as well as coherent and integrated policies to ensure long-term economic and environmental sustainability of the agri-food sector. Moreover, the agri-food sector needs to be viewed within the context of the domestic and international economy.

The development of the bioeconomy is not intrinsically sustainable. Economic, social, and environmental-trade-offs and risks are unavoidable. For example, while the reduction of GHG emissions is a key driver in fostering the development of a bioeconomy, there are concerns about the overall GHG savings that result from feedstock production, land-use changes, and bioenergy conversion. There are also significant risks and trade-offs in the development of a large-scale increase in biomass utilisation. A major risk in developing the bioeconomy lies in the increased competition between food supply and non-food biomass production. An important dilemma is that the expansion of the production of industrial products on farms will divert farmland from food production to other uses, and thus the bioeconomy will accentuate the “food versus fuel” concerns currently associated with biofuels. These are valid concerns and obviously food comes first. Therefore, two major priorities should be met in developing the bioeconomy. First, improving agricultural productivity, and second, reducing waste and increasing the efficiency of use of agricultural and other products. Several studies, including OECD work, have shown that there is a great potential to increase agricultural productivity even with existing technology, whereas new technologies that are part of the bioeconomy suggest much larger potential for getting more out of our land and water resources while preserving biodiversity.

Besides competing for land use, other challenges in developing the bioeconomy of the agriculture and food system faced by policy makers include lack of public awareness and enhancing public acceptance and availability, understanding the role of financing to address risks, regulatory restrictions, addressing educational and skills requirements, tackling transport logistics, facilitating market opportunities, and developing a framework and indicators to monitor and evaluate performance.

The transition to a bioeconomy requires a holistic and integrated approach which takes into account the myriad of inter-linkages within and between sectors, within and across value chains and between actors at different levels from the private sector, to individuals and public actors at all levels from local to the international level. Necessary prerequisites for a successful transition to bioeconomy are sound policies and institutions for knowledge development and sharing, finance of innovation and development, environmental trade and technological regulations, and integrated agricultural, energy and environmental policies. Social dialogue, policy coherence, and collaboration at the national, regional and international levels are essential.

To be continued