Is ethanol really that bad???

Articles — By forcechange on February 8, 2008 3:01 am

 

As was widely reported a commonly held piece of conventional wisdom was shattered by a study published in the magazine Science (unavailable without a subscription).  The study found that the production and use of corn-based ethanol actually results in a DOUBLING of CO2 emissions compared to that released by the burning of oil.  It had previously been claimed that replacing oil with ethanol would reduce greenhouse emissions by 20%.  If this study is accurate, not only are our attempts at converting to ethanol not helping but they are in fact substantially exacerbating the problem. 

The study asserts that it’s not the burning of ethanol itself that is the problem but rather the need to clear and convert massive amounts of natural forest and grasslands in order to grow the biofuel crops necessary to produce the ethanol.  A major problem is that for every bit of farmland that is designated for fuel production, an equal amount of previously unused land must be claimed in order to make-up for that loss in the food supply.

Further illustrating the inefficiency of ethanol the study notes that it currently costs $30 to purchase a tradable emission credit to offset the release of one ton of CO2, yet it costs $500 to avoid releasing one ton of CO2 through the use of corn-based ethanol.

 This issue raises a very interesting point regarding the nature of pro-environmental policies.  Given the state-of-the-art nature of many green technologies it is often difficult to determine which alternative solution actually makes the most sense.  For example, if you had asked an average person on the street a year ago what was the best alternative to gasoline they probably would have answered “ethanol.”  However, as science continues to develop we learn that often times our convensional wisdom is completely wrong. 

One potential lesson to be learned is that whichever strategy we, as a society pursue, the structure needs to be flexible enough to allow for rapid changes in strategy based upon the most up-to-date technology and studies.  In our opinion the wrong approach to take is that which we have been pursuing, whereby the federal government provides subsidies to an industry of choosing.  (In this case it is corn-based ethanol producers.) 

Subsidies, instead of promoting innovation, often tends to reward the status-quo.  Governments are notoriously bad at making centralized planning decisions and we feel a better alternative is to increase the cost through taxation of the resource desired to be replaced (in this case carbon emissions) and allowing the market to find a better alternative.  Some people would lose money and some would become rich, but the end result would almost surely be the most efficient and environmentally positive solution.