Morning Bell: The Ethanol Disaster Lesson

Conn Carroll /

The Environmental Defense Fund this week released a “study” purporting to show that instituting a cap-and-trade system to reduce carbon emissions in the United States would have virtually no economic impact. These claims would be laughably false if policies previously adopted at the behest of the environmental movement were not already contributing to the starvation of millions worldwide.

Biofuel mandates and hunger
According to the World Food Program, more than 100 million people are being driven into poverty by a “silent tsunami” of sharply rising food prices. The hungry are rioting in the Caribbean, Africa and Asia. Although there are other factors, experts agree that government-mandated use of biofuels contributes significantly to rising food prices across the globe.

CNN reports: “U.S. ethanol production is on course to account for about 30 percent of the national corn crop by 2010, dramatically curtailing the amount of land available for food crops and pushing up the price of corn flour on international commodity markets.” UNESCO issued a report concluding: “The diversion of agricultural crops to fuel can raise food prices and reduce our ability to alleviate hunger throughout the world.” The United Nations’ special rapporteur for the right to food, Jean Ziegler, said biofuels are “a crime against humanity” because they push up global food prices.

Earth Policy Institute founder and president Lester Brown and Clean Air Task Force climate specialist Jonathan Lewis wrote yesterday in The Washington Post:

Turning one-fourth of our corn into fuel is affecting global food prices. U.S. food prices are rising at twice the rate of inflation, hitting the pocketbooks of lower-income Americans and people living on fixed incomes. Globally, the United Nations and other relief organizations are facing gaping shortfalls as the cost of food outpaces their ability to provide aid for the 800 million people who lack food security. Deadly food riots have broken out in dozens of nations in the past few months, most recently in Haiti and Egypt. World Bank President Robert Zoellick warns of a global food emergency.

Biofuel mandates and the environment
Even worse than the immediate harm to humans is the longer-term harm to the environment. Brown and Lewis wrote:

It is now abundantly clear that food-to-fuel mandates are leading to increased environmental damage. First, producing ethanol requires huge amounts of energy — most of which comes from coal. Second, the production process creates a number of hazardous byproducts, and some production facilities are reportedly dumping these in local water sources. Most troubling, though, is that the higher food prices caused in large part by food-to-fuel mandates create incentives for global deforestation, including in the Amazon basin. As Time magazine reported this month, huge swaths of forest are being cleared for agricultural development.

Also in doubt is the claimed benefit of biofuels in reducing carbon emissions. Two recent studies published in the journal Science show the rush to embrace biofuels is increasing greenhouse gas emissions rather than reducing them. Britain’s chief scientific adviser in its Department for Environment, Food and Rural Affairs warned that biofuels “could exacerbate climate change rather than combat it.

Let’s not ‘do something’ we’ll regret later
The doubt surrounding ethanol’s overall impact on carbon emissions highlights the lie at the core of any cap-and-trade system. There’s no scientific certainty that issuing carbon “credits” will  reduce emissions. As the biofuel debate shows, the scientific consensus doesn’t exist to allocate credits properly. The U.N. agency tasked with approving carbon credits worldwide doesn’t have a proven scientific method for issuing permits. That’s why the European Union’s cap-and-trade system failed and continues to fail.

Reviewing liberals’ disastrous biofuel policy, Rep. Jim McGovern (D-MA) recently told the New York Times that some of his colleagues “had come to realize that Congress made a mistake in backing biofuels, not anticipating the impact on food costs.” McGovern went on to say: “If there was a secret vote, there is a pretty large number of people who would like to reassess what we are doing.”

Cap and trade would not just affect fuel prices. It would touch every sector of our economy. Americans are smart enough to know the EDF study showing cap and trade won’t cost the economy is complete fantasy. Just look at what the much more modest biofuels mandate has wrought. Hopefully, Congress will learn this lesson in time to avoid a cap-and-trade calamity.

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