no consensus on magnitude or even direction of net effects.   Even if in certain cases longer term dynamic effects may   dominate for the economy as a whole, the considerable risks   of welfare losses for certain stakeholders warrant careful consideration—especially with regard to the most vulner-   able persons. More research is needed to develop and apply   interdisciplinary tools that assess these issues more clearly   (e.g., economic cost-benefit analysis).                                          Development of small-scale applications for biodiesel and   unrefined bio-oils. The environmental and social costs of   producing biofuels can be considerably lower in small-scale   applications for local use due to more contained demands   on land, water and other resources. At the same time, the   benefits for social and economic development may be high-   er, especially in remote regions, where energy access and ag-   ricultural exports are complicated by high transport costs   (Kojima and Johnson, 2005). Landlocked developing coun-   tries, small islands, and also remote regions within coun-   tries may fall into this category—if they can make available   sufficient and cheap feedstock without threatening food   security. Especially biodiesel offers potential in small-scale   applications as it is less technology and capital intensive to   produce than ethanol. Unrefined bio-oils offer similar ben-   efits and their production for stationary uses such as water   pumping and power generation is being analyzed in several   countries, e.g., focusing on Jatropha as a feedstock (Indian   Planning Commission, 2003; Van Eijck and Romijn, 2006).   Such schemes may offer particular potential for local com-   munities when they are integrated in high intensity small-   scale farming systems which allow an integrated production  

  of food and energy crops. More research is needed on the   costs and benefits to society of these options, taking into   consideration also other energy alternatives,   Conduct R&D on electricity and heat generation technolo- gies from biomass to improve operational reliability. Some   forms of bioelectricity and bioheat can be competitive with   other off-grid energy options (e.g., diesel generators) and therefore are viable options for expanding energy access in certain settings. The largest potential lies with the produc-  tion of bioelectricity and heat when technically mature and   reliable generators have access to secure supply of cheap   feedstocks and capital costs can be spread out over high   average electricity demand. This is mostly the case on site   or near industries that produce biomass wastes and residues   and have their own steady demand for electricity, e.g., sugar,   rice and paper mills. The economics as well as environmen-  tal effects are particularly favorable when operated in com-  bined heat and power mode. Biomass digesters and gasifiers   are more prone to technical failures that direct combustion   facilities, especially when operated in small-scale applica-  tions without proper maintenance. More research and de-  velopment is needed to improve the operational stability   of these technologies as well as the design of institutional   arrangements, including potential integration with biomass   processing industries, livestock holdings and mixed farm-  ing. However, modern bioenergy is only one of several op- tions available for advancing energy access and in each case   local alternatives need to be compared regarding economic   costs as well as social and environmental externalities (Ta-  ble 6-6).