24 July 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.

4 comments:

  1. It sounds like some Congressmen are making efforts to stop ethanol requirements so they're not totally silent right now.

    http://www.nytimes.com/2008/07/23/business/23ethanol.html

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  2. What's really crazy about the ethanol program is that there is currently a 54-cent tariff on foreign ethanol (i.e. from Brazil). It is clearly not a program to help American motorists wean themselves from oil, but rather a handout to American farmers.

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  3. David, Congresscritters like to give things away and certainly have little interest in tighten the pork spigots.

    As Obama is from ADM-land, we are sure to have this costly, destructive nonsense continue. But he'll just be following the Bush admin, which never found a corporate welfare recipient unworthy, particularly if it was one in a "Red" state or with electoral vote potential.

    Sadly, the ethanol program had its roots in Carter's 1980 grain embargo of the USSR after their invasion of Afghanistan. The ethanol program was a bribe to get farmers to go along. Gee thanks, Jimmy.

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  4. David, if you're interested in bringing the price of food down, I can do that. Just tell me how to go long on food prices.

    This used to be a joke. It's not anymore.

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