Biofuel subsidies: bad economics and bad for the environment

Peter Suderman pokes some holes in the balloon of bio-fuel subsidies:

Thanks to these crop shifts [from barley to subsidised corn and rapeseed], the price of barley has doubled in the past two years, an increase that eventually gets passed along to consumers. Some brewers have raised their prices already, and many others are planning on raising them soon. German beer drinkers are already feeling the hit on beers like Erdmann's Ayinger, which raised its price from 6.10 euros to 6.40 euros over the last year. That's roughly fifty cents a beer for Germans who consume an average of more than 30 gallons of beer person each year.

But that seems like a fairly small price to pay for such a worthy cause, right? After all, if, as scientists like NASA climatologist James Hansen say, global warming threatens humanity with imminent catastrophe from climactic shifts and sea level rise, then biofuels might be a little more important than brew prices.

Problem is, it turns out that even if you consider climate change a serious threat, biofuels are hardly an effective means of preventing it. In fact, they just might exacerbate the problem. These days, anyone saying otherwise—like, for example, European regulators—must be sloshed.

Two studies published in the journal Science at the beginning of February indicate that, rather than producing less carbon emissions than regular fuels, biofuels, once the full production costs are taken into account, probably produce greater overall emissions than their traditional counterparts. And the difference isn't tiny, either. According to one of the studies, "converting rainforests, peatlands, savannas, or grasslands to produce biofuels in Brazil, Southeast Asia, and the United States creates a ‘biofuel carbon debt' by releasing 17 to 420 times more carbon dioxide than the fossil fuels they replace." As Joe Fargione, a scientist at the Nature Conservancy and author of one of the studies, has explained, "carbon debt" is what results from the additional land clearing, beyond food production, needed to grow biofuel crops. Clearing land releases natural stores of carbon into the atmosphere; so greater reliance on biofuels means increasing our carbon debt.

That's a heck of a two-for-one deal, isn't it?

It's actually even better than 2-for-1, as we get all these "benefits": increased cost of food (because cropland is diverted away from food to biofuel production), higher taxes (to pay for the subsidies to farmers), lower fuel efficiency per litre of fuel, increased carbon dioxide in the atmosphere, greater pressure on rainforests (to replace the food crops no longer being produced elsewhere), and much more government involvement in both farming and food production.

It's the civil equivalent of what the military calls a "force multiplier".