Is there any trade crazier than the liquid biofuel business? Apart from a handful of cars and vans running on used chip fat, it exists only because of government rules and subsidies. So what social benefits do these buy?
Biofuels are supposed to reduce greenhouse gas emissions. They do the opposite. Almost all of them produce more greenhouse gases than petrol (gasoline) or diesel, for two reasons:
- emissions of nitrous oxide (a very powerful greenhouse gas) caused by the application of nitrogen fertilisers
- the destruction of grassland, wetland and forest caused by the expansion of agriculture stimulated by this new market (see this study on the biofuel carbon debt and this one on biofuels increasing greenhouse gases
Biofuels - especially biodiesel made from palm oil - also cause other kinds of environmental havoc. They are now among the major drivers of deforestation in Indonesia and Malaysia, wrecking tens of millions of hectares of primary forest and driving orang-utans and other wildlife towards extinction
And they help to starve the world. Last year, the global food crunch was caused by a decline in the world's stockpiles of cereals: they fell by around 53m tonnes. The production of biofuels consumed almost 100m tonnes. The extra millions who died as a result of malnutrition-related diseases when the price of grain rose last year did so largely because we took their food to put in our tanks.
Yet all motorists in this country are forced by law to participate in this crime against humanity. Why? Because, by taking into account only some of the emissions produced by biofuels, the government can claim to be cutting greenhouse gas production, thereby helping it to meet the legally binding targets in its climate change act. Because it means that people can carry on driving without constraint, this policy causes the government no political pain. It is exchanging political convenience at home for the lives of people overseas.
In the US the biofuel business is stimulated by a series of massive subsidies, running into hundreds of millions of dollars a year. Yesterday the European Union imposed temporary anti-dumping tariffs on US biodiesel on the grounds that the subsidies there are distorting trade, unfairly harming biodiesel producers over here. There's already plenty of aggro being generated over the Buy American clause in the US stimulus plan: this new decision could be explosive.
So here's what we gain from the biofuels trade:
1. Global environmental destruction
2. Higher greenhouse gas emissions
3. Mass starvation
4. The loss of hundreds of millions of dollars
5. The prospect of a new trade war.
Is there anyone out there who still thinks they are a good idea?