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Energy Economics
Editorial, Los Angeles Times
To the annals of market manias and regulatory follies, a new chapter is being added: The Great Ethanol Bubble of 2008. It is possible that someday a fuel made from a cheap, abundant, renewable crop may replace oil. But it won’t be food-based ethanol. It’s time not only to stop subsidizing the stuff but to revamp the chaotic, politicized and wasteful system of subsidies for alternative energy.
It is now well established that inefficient corn ethanol actually pumps out more total life-cycle carbon emissions than gasoline, and total emissions from ethanol coming even from the most advanced refineries offer at most a 25% improvement over gasoline in terms of greenhouse gases — at a staggering environmental and financial cost.
Despite a growing international outcry, biofuels are not a major culprit in the global food crisis. Droughts, high oil prices, commodities speculators and the weak dollar are more to blame. But under U.S. law, biofuels production must quadruple in the next 14 years. As ethanol production soars from 8 billion to 36 billion gallons in 2022, subsidized fuel crops could displace less-profitable food production and contribute to world hunger. Still, politicians hate to phase out popular giveaways like the 51-cent-a-gallon ethanol subsidy.
… Carbon-weighted incentives would be rational, predictable and market-based — a smart idea. But there won’t be money to develop good ideas if we can’t ever bring ourselves to pull the plug on mistakes like corn ethanol
(4 May 2008)
Contributor Joseph Neri writes:
A number of interesting examples illustrate how tax subsidies actually contribute to irrational energy and environmental policies.
Are these kids causing a global food shortage?
Team DNA, Daily News and Analysis (India)
MUMBAI: Reactions in India ranged from disbelief to irritation following the latest Bush-speak – the US President says the growing prosperity of India’s large middle class is contributing to rising food prices around the world.
“Just as an interesting thought for you, there are 350 million people in India who are classified as middle class. Their middle class is larger than our entire population. And when you start getting wealth, you start demanding better nutrition and better food. And so demand is high, and that causes the price to go up,” he said, commenting on the economy during a visit to World Wide Technology in Maryland Heights, Missouri.
… Experts dispute the claim, pointing out that dietary patterns had not changed that much in India. Ashok Gulati, director of the International Food Policy Research Institute, told DNA: “As people get richer, they eat more meat and some grain goes to feed the animals for meat. But this is not happening so much in India, where few people eat beef or pork.”
… Earlier, in an interview in Washington, India’s finance minister, P Chidambaram, had blamed the US diversion of crop land for bio-fuel as the primary reason for the food shortage: ‘When millions of people are going hungry, it’s a crime against humanity that food should be diverted to biofuel,’ he said.
But Bush would not agree that America’s new-found love for corn-based ethanol was causing the prices of food to go up
(4 May 2008)
America: Victim of Highway Robbery
The Onion
Editorial cartoon
(5 May 2008)
