The American, the journal of the conservative American Enterprise Institute, published an article today online evaluating the EPA’s biofuels mandates (a part of the 2007 Energy Independence and Security Act) and makes the case that biofuels are a lose-lose proposition, both for the environment and the consumer.
Forcing the market to produce large amounts of renewable fuel will harm consumers in two ways: it will increase prices at the pump, because biofuels are more costly than gasoline, and it will drive up the price of food, because it diverts crops into fuel. The impact of food price inflation will weigh most heavily in developing countries where food purchases comprise larger shares of consumption. Food expenditures account for as much as 70 percent of household consumption among lower income groups in the developing world.
The AEI is completely correct on this issue - all the way to criticizing the biofuels mandates in the new Waxman/Markey climate bill.
Right now, Congress is considering the Waxman-Markey bill, which would establish an economy-wide cap on greenhouse gases. With a firm cap in place, a law that mandates different fuel mixes will increase the cap’s compliance costs and will not achieve any further reductions. Indeed, to the extent that land use changes are not captured by the cap, the biofuels mandate may actually lead to emission increases. Unfortunately, not only does the Waxman-Markey bill keep the biofuels mandate in place; it goes one step further by creating a renewable electricity standard that mandates different fuel types for electricity generation.
So what’s going on? Since when does the AEI care about saving the rainforest? Feeding hungry children in other parts of the world?
It turns out that stopping the rise of biofuels is advantageous to the environment, but also to oil companies - who have strong ties to the AEI. Oil companies are right there on the frontlines of the biofuels debate, arguing that business as usual, i.e. massive oil profits, should be allowed to continue without competition from the new so-called “renewable” fuels industry.
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That’s why it’s so important that while we’re fighting biofuels, we remember that we need to to promote solutions that aren’t business as usual. That means consuming less fossil fuel, reducing our energy usage, greening our grid with wind and solar, and promoting proven transportation alternatives - like plug-ins, public transportation and pedal power.
Biofuels aren’t the solution, but fossil fuels still have to go.