Force Change

McCain opposes ethanol subsidies but supports cleaner coal and nuclear subsidies

The concept of unintended consequences is one that we look at frequently on this blog, with ethanol, of course, being one of our biggest discussion topics.  Sen. McCain throughout his career and on the campaign trail has claimed that he is opposed to government mandating specific solutions, opting instead for market based answers.  He has directed much of this criticism towards Sen. Obama for his support for ethanol subsidies.  However, it is not clear that McCain is completely consistent in this approach, since he has recently been advocating subsidies for cleaner coal and nuclear power. 

Of course the most obvious criticism of McCain here is for hypocrisy.  However, the more interesting question is what role should our government play in promoting alternative energy and clean technology?  We generally believe that market based solutions like the proposed cap-and-trade system are most likely to produce the best result.  However, tax breaks and subsidies may also play an important role, as they have with solar and wind energy development.  The problem is when the government’s directives result in a “solution” that may not be the most efficient or practical (as may be the case with ethanol), and we then are faced with a series of undesirable and unintended consequences.  Of course it is easy to judge, in retrospect, which solution was good and which was bad. The hard, if not impossible, part is to do this prospectively, which probably cuts in favor of market based, instead of government mandated, solutions.

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Posted in Energy, General, Greenhouse Gas Emissions, Politics | No Comments »

Addicted to corn, part II

Despite record high gas prices, it has previously been theorized that without the increase in biofuel use the past few years, gasoline might actually cost 15% more than before the adoption of these alternative fuels.  This has led us to wonder whether we have become addicted to corn? 

However, now, with the recent floods in the Midwest, another twist with respect to our increased reliance on ethanol has developed.  The flooding that has inflicted widespread damage on the ethanol industry–ranging from the destruction of some corn crops, factory closures and transportation line disruptions, may now be responsible for a new spike in the cost of gasoline.  This is because the decreased production of ethanol will increase the cost of the supplies that are available to be added to our fuel supplies.  Currently, gasoline in the U.S. contains about 7% ethanol. 

We may now face a situation where not only are the net environmental benefits of ethanol questioned, but our current reliance on it may also be increasing gasoline prices.  If these two assumptions are correct, we may have created a situation that is a net negative.  Of course, we are still in the early stages of biofuel adoption and all of its impacts are not fully understood.  Nonetheless, this further illustrates the dangers of rapid policy shifts that can result in unintended consequences such as these. 

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Posted in Energy, General, Greenhouse Gas Emissions, Human Health, Transportation | No Comments »

European agency recommends pullback from biofuel craze.

In light of recent studies indicating that biofuels, such as ethanol, have numerous adverse global effects, and may actually be worse for the environment than petroleum, the European Environment Agency’s scientific advisory board recommended this week to suspend the 10% biofuel target in place for the EU.

It is unclear what policy change, if any, will result, but this is indicative of a push back against the trend in favor of biofuels. Given all of the recent scientific criticism of biofuel, it will be interesting to see if the United States follows suit in looking to roll back these policies, or if we have in fact, already become addicted to corn.

Hat tip: Green-blog.org

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Posted in Uncategorized | No Comments »

Shade found illegal in California?

A seven year dispute between two neighbors in the Silicon Valley town of Sunnyvale recently resulted in a criminal conviction for casting too much shade on a neighbor’s property. The facts of the case were as follows: Neighbor A (who drives a Prius) planted a series of redwood trees in 1996. Within 5 years, or so, those trees had grown so tall that they cast a large shadow over the house next door, owned by Neighbor B (who drives an electric car).

Neighbor B did not appreciate the shade, and asked Neighbor A to replace them with a smaller alternative. Neighbor A apparently refused. Fortunately for Neighbor B, he received creative legal counsel, which appears to have advised him of the details of the California Solar Shade Act of 1978, which makes it a criminal offense to block more than 10% of a set of solar panels’ access to the sun. Consequently, Neighbor B installed panels on his property and made a demand to Neighbor A to trim the trees or face criminal prosecution. Neighbor A again refused and was subsequently hauled into court to face a charge of criminal violation of the Solar Shade Act.

Neighbor A was convicted of violating the Act and, while apparently not sentenced to jail or a fine, was ordered to trim their trees so that no more than 10% of Neighbor B’s solar panels were shaded. Apparently this was the first conviction under the 1978 Act.

This conflict is interesting because it pitted two pro-environmental public policies against each other (tree growth vs. solar power). However, of course, neither of these policies were really at issue in this case. It was most likely just a good old fashioned feud between neighbors that took on the appearance of a green policy debate merely because environmental laws provided the plaintiff with a weapon to wield in the dispute.

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Posted in General, Governmental Regulations, Green Design, Of Interest | 2 Comments »

An overview of the arguments against biofuels.

An op-ed at SFGate.com looked at a topic we’ve touched on a few times here—whether ethanol production is reducing or exacerbating the problem of greenhouse gas emissions. We’re interested by this topic because it deals with the potential dangers of reflexive governmental mandates. Whether ethanol is actually worse for the environment than petroleum, we’re not sure, but this opinion piece does a nice job of identifying the major criticisms of biofuels and their negative effects on the environment and society in general.

Those criticisms are as follows:

-Increased demand for corn (and other biofuel crops) causes the price of those crops, and consequently food, to increase.
-Increased crop prices make it more expensive for farmers to feed their livestock, thereby increasing the price of meat and dairy products.
-Biofuel production requires extreme amounts of water—in fact, one gallon of ethanol requires four gallons of water to produce.
-The increased demand for biofuel crops leads to deforestation and destruction of wetlands and grasslands, to make space for the planting of those crops. Both the process of clearing these lands, as well as the loss of their carbon consuming foliage, lead to increased greenhouse gasses in the atmosphere.

And towards the end of the op-ed piece, the author basically throws in the kitchen sink, with the following paragraph:

Scientists predict that the Gulf of Mexico, already polluted by agricultural runoff from the United States, will only get worse as demand for ethanol, and therefore corn, increases. Meanwhile, rain forests throughout Central and South America are being razed to make way for land to grow biofuel components. Tortilla shortages in Mexico, rising flour prices in Pakistan, Indonesian and Malaysian forests being cut down and burned to make palm oil, and encroachments upon the Amazon rainforest due to Brazilian sugar cane production — all these developments indicate that biofuels are turning out to be more destructive than helpful.

While complete scientific consensus has not yet been reached on this topic, these arguments that biofuels are a bad thing for the planet sure seem compelling as more information about their consequences comes to light.

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Posted in Energy, General, Governmental Regulations, Greenhouse Gas Emissions | No Comments »

Green pollution.

Our 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.)

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Posted in Corporate Behavior, Science and Innovation, Water Pollution | No Comments »