Dual-fuel gas station at Sao Paulo, Brazil. Alcohol (ethanol) and G gasoline (Photo credit: Wikipedia)
Last week the British newspaper Telegraph leaked a portion of the report by the UN's Intergovernmental Panel on Climate Change (IPCC) due to be released today, in which Robert Mendick, the paper's chief reporter, said the UN now officially warns that growing food for fuel rather than for people hurts the environment and starves people. Said Mendick:
Biofuels, rather than combatting the effects of global warming, could make them worse. [The] report represents a dramatic turn-about for the … IPCC.
Concerns about turning crops into fuel in order to fight the alleged negative impact of questionable man-made global warming have been increasing for years. Back in 2007 National Geographic News reviewed a report from the UN entitled “Sustainable Bioenergy” which warned at the time that an aggressive move to force refiners to use ethanol as part of their mix in gasoline “will spawn reforestation, deplete soil nutrients and undermine food security” for poorer nations. Said the study:
The rapid growth in … liquid biofuels production will raise agricultural commodity prices and could have negative economic and social effects, particularly on the poor who spend a large share of [their] income on food.
It went on to say that in Southeast Asia biofuels businesses were already busy clearing forests to make room to grow more crops such as palm, noting that “after fossil fuel use, deforestation is the largest single source of greenhouse gas emissions in the atmosphere.”
Calling it “demon ethanol”, economist Mark Perry asked rhetorically:
What is there to possibly like about biofuels like “demon ethanol” (unless of course you're a rent-seeking corn farmer)? It ruins car engines, it's an inferior and costly fuel, it's bad for the environment, it's a political boondoggle, it stresses water supplies, it increases malnutrition in vulnerable populations, and it raises taxes, gas and food prices.
The case against ethanol mandates has been growing for years. In November 2013 the Huffington Post reviewed a study by the Associated Press that concluded that the promises of cleaner air and lower CO2 emissions, all in the name of saving the planet, have been broken:
The ethanol era has proven far more damaging to the environment than politicians promised and much worse than the government admits today.
As farmers rushed in to find new places to plant corn, they wiped out millions of acres of conservation land, destroyed habitat and polluted water supplies.
The AP report noted that just during the Obama administration more than five million acres of pristine land, set aside for conservation, have been plowed under to plant corn. In the process CO2 that had been locked up in the soil was released to the atmosphere. Fertilizer use has skyrocketed, some of which has entered the drinking water, contaminated rivers, and increased the huge “dead zone” in the Gulf of Mexico.
It takes energy to make fertilizer as well as ethanol, and when coal or natural gas is burned they release CO2 which more than offsets any gains estimated by burning ethanol in place of gasoline. When the EPA cranked the numbers to justify its mandates, it had to change the assumptions to meet the requirements of the law. Huffington explained:
The EPA's experts determined that the mandate would increase demand for corn and encourage farmers to plow more land. Considering those factors, they said [in their initial analysis], corn ethanol was only slightly better than gasoline when it came to carbon dioxide emissions.
Sixteen percent better, to be exact. And not in the short term. Only by 2022.
However, the law required that ethanol use would result in a twenty percent improvement, so the EPA changed its assumptions. It assumed that corn yields per acre would greatly improve which would allow farmers to produce what was needed without plowing new ground. Aided by input from Monsanto and DuPont, the EPA came up with better numbers: now ethanol was 21 percent better than gasoline – one percentage point above the requirement.
It didn't take long for the falsity of those new numbers to show up in the real world:
The regulations took effect in July 2010. The following month, corn prices already had surpassed the EPA's [newly revised] long-term estimate of $3.22 a bushel….
Yields, meanwhile, have held fairly steady.
What about the “dead zone” in the Gulf of Mexico? As nitrates from fertilizer flow down rivers into the Gulf they boost the growth of algae. When algae die, the decomposition consumes oxygen, leaving behind a zone where aquatic life can't live. By the end of 2013 that dead zone on the floor of the Gulf was larger than the state of Connecticut.
What about water pollution? When nitrates from fertilizer flow into drinking water, they must be removed by water plants like the Des Moines Water Works. But that plant is already maxxed out, according to Bill Stowe, the plant's general manager: “This year … the nitrate levels in both rivers [Des Moines and Raccoon] were so high that it created an impossibility for us.” For three months last summer the plant had to operate 24 hours a day which still couldn't keep up, forcing city officials to ask its customers to use less water so the utility had a chance to catch up with the nitrate pollution.
What about the poor? A small increase in the cost of commodities like corn and related products can have a devastating effect when 70 percent of an individual's income goes for food. In December the Telegraph called the ethanol mandate a “moral abomination”:
In moral terms, the fact that using land to grow fuel rather than food is an abomination in a world where almost a billion people still go hungry.
It is estimated that European biofuels now take up enough land to feed 100 million people, and the United States' programme takes up even more….
If we don't rein in the biofuels juggernaut, models show that another 40-135 million people could be starving by 2020.
The political pressure to keep the mandate in place and the tax benefits flowing to farmers is nearly irresistible. As noted by Michael Tennant at The New american,
The [Obama] administration seems to have contented itself with good, old-fashioned political payoffs.
The ethanol mandate may do nothing to stop “global warming” – in fact it may actually increase the amount of carbon dioxide in the atmosphere … but it's good for certain industries with powerful lobbies.
The conclusion reached by the UN's latest report is unescapable: the push for biofuels to save the environment is hurting the environment and starving people. As Robert Murphy, senior economist for the International Economic Review, stated:
When the government intervenes in the market, it disturbs the “natural equilibrium” that the [market] system had established….
When policymakers tinker with market outcomes, they achieve all sorts of unintended consequences – even though they may be perfectly predictable consequences…
Whether it's wind turbines slaughtering birds or anti-carbon policies condemning developing nations to decades of poverty, the still-favored environmental policies have plenty of unintended consequences that undercut their stated goals.
If environmentalists turned out to be dead wrong about biofuels, will they consider the possibility that they're wrong on other government interventions into markets too?
Not so long as the mandates remain in force and the subsidies continue to flow.
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