Implications of Biofuel Policies for Water Management in India

India has developed a national biofuel policy to increase energy security, reduce greenhouse gas emissions, and stimulate rural development. In this policy, the government has set blending targets for mixing ethanol and biodiesel with gasoline and diesel, respectively. In India, ethanol is produced from irrigated sugar-cane while biodiesel is produced from jatropha, which is said to require no irrigation. This paper analyzes the possible impacts of an increase in sugar-cane and jatropha production on water management and use. It finds that India's biofuel policy is likely to place additional pressure on scarce water resources. Although the development of biofuels may be necessary, care must be taken to anticipate its likely impacts on water resources.