12 December, 2007

Exhibit A

Another example of why enthusiastic environmental policy and entrenched politics make poor bedfellows:

It's the extra demand for grains to make biofuels, spurred heavily in the United States by government tax subsidies and fuel mandates, that has pushed prices dramatically higher. The Economist rightly calls these U.S. government subsidies "reckless." Since 2000, the share of the U.S. corn crop devoted to ethanol production has increased from about 6 percent to about 25 percent -- and is still headed up.

Biofuels became politically fashionable because they combined benefits for farmers with popular causes: increasing energy "security"; curbing global warming. Unfortunately, the marriage is contrived. Not only are fuel savings meager, so are the environmental benefits. Substituting corn-based ethanol for gasoline results in little reduction in greenhouse gases. Indeed, the demand for biofuels encourages deforestation in developing countries; the New York Times recently reported the clearing of Indonesian forests to increase palm oil production for biofuel. Forests absorb carbon dioxide, a greenhouse gas.

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