Addicted to corn?
Environmental Capital, at WSJ.com, looked at a subject we have discussed regularly here—which is: are biofuels a part of the solution, or an unintended exacerbation of the problem of global warming?
As we’ve noted previously, some recent studies indicate that biofuels, such as ethanol, may actually be worse for the environment than the fossil fuels they replace. In our discussions, we’ve usually limited our analysis to which option releases more aggregate CO2 into the atmosphere. However, the Environmental Capital post notes that some experts believe that biofuel production has resulted in a 15% decrease in oil prices. Therefore, if recent policies by developed nations to increase biofuel usage are reversed, would that result in a subsequent 15% increase in oil prices?
We find this question interesting because it presents two options that are not normally pitted against each other in such a manner. If biofuel is worse for the environment than petroleum, but its production results in more affordable oil, will we find ourselves “addicted to corn?”
Green pollution
Regular readers will not be surprised by theme of today’s post:
The New York Times had an article regarding the damage that many new biodiesel factories are doing on local environments. Biodiesel factories, like all manufacturing processes, tend to create substantial byproduct and waste. The Times’ article notes that many of these factories are allowing that waste to flow directly into the local environment.
The good news is that much of the waste from ethanol, and other biodiesel production, is fairly nontoxic, since that waste is often a type of vegetable oil or glycerin (alcohol). With that said, the release of even nontoxic oils into local water sources can suffocate much of the life in and around the water. According to the article, a vegetable oil spill can be just as deadly for birds as a crude oil spill.
This type of unintended consequence relating to alternative technologies is a common theme for this blog. Of course this problem does not lead to the conclusion that pursuing alternative fuel is a bad idea. Rather, the same problems that face non-green enterprises (such as irresponsible behavior, misspricing of externalities, ineffective regulations, etc.) will face many green enterprises. This will increasingly become the case as green tech becomes more profitable and draws more mainstream businesses. (A much better problem to have than before, when green business was only pursued by nonprofits.)
A failure of leadership in the private sector.
This is not a new story, but given our common theme regarding the failure of federal government officials to provide leadership on environmental issues, we thought it would be useful to give an example of a private leader also failing to provide leadership. As has been widely reported, General Motors Vice Chairman Bob Lutz described global warming last month as a “total crock of s–t” to a group of reporters in Texas.
Although Lutz claims his remarks have no bearing on his company’s overall policy towards greenhouse gas emissions, it is not insignificant that he holds these views. GM has often been criticized for failing to adapt rapidly enough to the changing consumer market, which shifted from demanding big gas guzzling SUVs to smaller more efficient vehicles. READ MORE
Is ethanol really that bad???
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.
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Private Leaders
