Soob

Politics, Foreign Policy, Current Events and Occasional Outbursts Lacking Couth

Monday, July 07, 2008

Save the Planet, Starve a Haitian

Some apparent bad news for fans of the green alternative to oil, bio-fuels. From a Guardian report (via Fabius Maximus.)

Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.

"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.

It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.

The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact.

Time to get a grip on knee jerk policy reactions to climate change. Preferably before we go about geo-engineering our planet.

8 comments:

Dan tdaxp said...

I think subsuming our fuel policy to third-world welfare policy is a mistake.

Eddie said...

I'm certain the corn ethanol barons are going to be begging Congress for more hand-outs because of the floods. What a racket.
Not to mention, this racket is costing Americans tens of millions in higher food prices.
Let's develop the far more efficient switchgrass and sugarcane ethanol.

Ymarsakar said...

I think creating global starvation and then using that to get policies to create global climate change is a pretty good overall strategy if revolution is the name of the game.

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subadei said...

Dan, I think subsuming our fuel policy to the alarmism of climate change is also a mistake.

Eddie,

"Let's develop the far more efficient switchgrass and sugarcane ethanol."

I recently heard an interview with Al Gore and the question of ethanol fuel and it's effect on the grain market came about. He attributed the whole deal to (paraphrasing) "a technology in the works." Which lends one to conclude that ethanol production will skip ahead to the base resources you mention and beyond. The issue, of course, is that such R&D should be conducted in laboratories and not on the global market.

ymarsakar,

"I think creating global starvation and then using that to get policies to create global climate change is a pretty good overall strategy if revolution is the name of the game."

Intriguing. It's got a very 5GW ring to it. I'm going to give this some more thought...

air setitik,

Thanks for the invite but, I'm afraid, I've already found myself.

Dan tdaxp said...

Dan, I think subsuming our fuel policy to the alarmism of climate change is also a mistake.

Clearly. Far better is to focus our fuel policy on growing the American economy and avoiding international rentiers.

Which is an area that will help America and Americans, and is above rhetoric such as "Save the planet, stare a Haitian."

subadei said...

"Clearly. Far better is to focus our fuel policy on growing the American economy and avoiding international rentiers. "

Agreed. However, mass starvation due to nonsensical energy policies effect America. Starvation due to drought and abject land misuse (overgrazing for example) is one thing. Starvation due to ill thought western policy is quite another and certainly has an effect on America as it will likely prove a catalyst for yet more anti-western instability in already failed or near failed states. Islamic fundies have been pointing the finger at the west for decades on the basis of pure ideology. Add a very real and tangible aspect such as astronomical maize prizes and you invite concrete, realistic foundation of resistance/retaliation. Bear in mind the pure supply and demand aspect will likely spill over into Latin America, a source of America's turbo charged demographics.

Bear in mind I'm speaking of the free market aspect and not the international subsidies that flatten domestic agriculture and therefore create an economic pandora's box: The populace buys cheap X from Western suppliers therefore what would be the domestic agricultural core cannot compete and so is forced to buy the cheap X...

subadei said...

Oh and the title was meant to be not rhetorical but ironic. The breathless proponents of CC or GW often site (and are of the left wing political proclivity) the devastating effect it will have on the 3rd world.