24 Jul 2008

Why Isn't Ethanol Dead?

Over at VoxEU,
New research shows that India, China, and speculators are not the culprits in the food price explosion. Biofuels were a significant element in the 2005-2007 food price surge as they accounted for 60% of the growth in global consumption of cereals and vegetable oils. There cannot be any doubt that biofuels were a significant element in the rise of food prices. Since new research also shows that biofuel support policies are disappointingly ineffective on environmental grounds, governments should reconsider them.
Is Washington going to reverse the ethanol policy? All I hear is thunderous silence. It would be amazing typical if the government could continue such a stupid, wasteful, destructive policy. These things make me cry.

Bottom Line: Politicians are more anxious to drill for oil and rescue Wall Street than keep the price of food down.