First-generation biofuels are an existing, scalable form of renewable energy of the type urgently required to mitigate climate change. In this study, we assessed the potential benefits, costs, and trade-offs associated with biofuels agriculture to inform bioenergy policy. We assessed different climate change and carbon subsidy scenarios in an 11.9 million ha (5.48 million ha arable) region in southern Australia. We modeled the spatial distribution of agricultural production, full life-cycle net greenhouse gas (GHG) emissions and net energy, and economic profitability for both food agriculture (wheat, legumes, sheep rotation) and biofuels agriculture (wheat, canola rotation for ethanol/biodiesel production). The costs, benefits, and trade-offs associated with biofuels agriculture varied geographically, with climate change, and with the level of carbon subsidy. Below we describe the results in general and provide (in parentheses) illustrative results under historical mean climate and a carbon subsidy of A$20 t?1 CO2?e. Biofuels agriculture was more profitable over an extensive area (2.85 million ha) of the most productive arable land and produced large quantities of biofuels (1.7 GL yr?1). Biofuels agriculture substantially increased economic profit (145.8 million $A yr?1 or 30%), but had only a modest net GHG abatement (?2.57 million t CO2?e yr?1), and a negligible effect on net energy production (?0.11 PJ yr?1). However, food production was considerably reduced in terms of grain (?3.04 million t yr?1) and sheep meat (?1.89 million head yr?1). Wool fiber production was also substantially reduced (?23.19 kt yr?1). While biofuels agriculture can produce short-term benefits, it also has costs, and the vulnerability of biofuels to climatic warming and drying renders it a myopic strategy. Nonetheless, in some areas the profitability of biofuels agriculture is robust to variation in climate and level of carbon subsidy and these areas may form part of a long-term diversified mix of land-use solutions to climate change if trade-offs can be managed.
