The impacts of biorefinery investments on employment, income, and food security in Nigeria

Abstract Bioeconomic innovation and investments in related production facilities, such as biorefineries, have accelerated in the last two decades. Public support of such investments is driven by the assumption that growth in bioeconomic value added will boost local economic development and contribute to environmental sustainability by substitution of fossil-based production and consumption activities. The local impacts of biorefining are context dependent, however, and empirical evaluations of past investments in biorefineries remain scarce. Here we use quasi-experimental methods to quantify the effect of biorefineries on employment, income, and food security of households in Nigeria. We combine data from expert interviews, spatial data products, and a panel of nationally representative household survey data for the years 2010 to 2016. Our empirical strategy relies on a combination of matching and Difference-in-Differences analysis and involves multiple robustness tests. While we do not find an employment impact, proximity to biorefineries increased household incomes but diminished food security. These impacts are heterogeneous across household groups and likely mediated by price and land use changes. We conclude that public support to biorefinery investments as well as corresponding regulatory measures must carefully account for context-dependent tradeoffs between local sustainability outcomes.