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  • Biofuels: The World’s Regressive Tax

    The rise in gas prices is reducing the American consumer’s disposable income, forcing a choice between filling up the tank and going out to dinner or taking a trip to the movie theater. But policy implementations in developed countries are doing much more damage internationally, like pushing 30 million people into poverty.

    That’s the latest number, according to Oxfam International, a confederation of 13 organizations that seek to alleviate poverty worldwide. It boils down to a combination of special interest politics and simple economics, says Oxfam’s biofuel policy adviser Rob Bailey:

    If the fuel value for a crop exceeds its food value, then it will be used for fuel instead. Thanks to generous subsidies and tax breaks, that is exactly what is happening.”

    Even worse, Members of Congress have blocked the importation of Brazilian ethanol through protectionist tariffs. Given the fact that Brazilian ethanol is much less damaging to global food security, the tariff only exacerbates the problem. Removing all mandates and lifting all barriers is a necessary step to allow the food value to compete with ethanol’s fuel value.

    The critics of biofuel policy continue to build and now far outweigh the supporters. Before we push millions more into poverty, Congress should take a hard, honest look at America’s ethanol policy, and the mandate should be repealed, along with the tax breaks and protectionist tariffs.

    Posted in Energy [slideshow_deploy]

    4 Responses to Biofuels: The World’s Regressive Tax

    1. John, Wichita says:

      I totally agree. The ethanol mandate should be repealed on scientific, economic and humanitarian grounds.

      American corn is a most important source of livestock feed and thereby becomes an important source of protein. Each person has a nutritional requirement for protein needed to maintain human health. With more and more corn being diverted from livestock feed to ethanol feedstock, how long will it take before we realize we have destroyed the meat industry and an important nutritional resource.

      Imagine that there were more cattle feeders than corn growers; then the farm vote would not be promoting ethanol subsidies and the market and politics would be in harmony. But savy political pressure groups (corn farmers), ethanol subsidies and legistative mandates have been promoted as neccessary political solutions to both energy and environmental problems. Actually it is a farm income support at public expense. Let's call them what they are. Farm state senators benefitted by the obfuscation and the public is stuck with manifold unintended costs: loss of highway tax revenue used to create ethanol subsidies, higher state sales and income and property taxes to make up for the lost highway tax revenues or deteriorating roads and bridges, higher grocery prices for grains and meat, more greenhouse gasses in the atmosphere, and likely a negative energy balance exacerbating the cost of energy, trade balance, and value of the dollar.

      Also I am not convinced that ethanol production doesn't consume more energy than it produces when all the inputs are counted including energy needs for fertilizer manufacturing, crop irrigation, tillage, harvesting, transportation, distillation. Ethanol for fuels requires less productive marginal farmland to come into production, because the best land is already in production growing corn for traditional uses. The marginal land is less efficient and requires more farm inputs. Remember it's the marginal land that is added to corn acreage when corn to ethanol is subsidized!

      And what about all the pollution from these activities? Don't tell me ethanol is a clean fuel. Carbon is spewed at each stage mentioned above. Also CO2 is a major byproduct of the corn to ethanol manufacturing process. And finally when ethanol is burned for fuel it spews still more carbon into the atmosphere. States that mandate "clean burning ethanol" are exporting their polution to those states where involved in ethanol and inputs manufacturing and farming.

      Farm state senators jumped on the politically expedient ethanol subsidy bandwagon out of a wish to be popular while ignoring scientific and economic wisdom. It's funny how they can vow allegance to free markets and simultaneously approve of subsidies for pet industries where self interest reigns.

      Ethanol subsidies were originally claimed neccessary by the infant ethanol for fuel industry until it learned how to be more economic. This was hogwash too. The efficiencies were already fundamentally known in the longstanding industrial and liquor ethanol industries.

      Ethanol for fuels is a national political, economic, environmental and humanitarian catastrophe. It certainly should not be subsidized or mandated. Too many people are being injured for the benefit of the few. Sadly many small ethanol plants are closing even with subsidies and mandates.

      It is time to stop the insanity.

    2. John, Wichita says:

      I totally agree. The ethanol mandate should be repealed on scientific, economic and humanitarian grounds.

      American corn is a most important source of livestock feed and thereby becomes an important source of protein. Each person has a nutritional requirement for protein needed to maintain human health. With more and more corn being diverted from livestock feed to ethanol feedstock, how long will it take before we realize we have destroyed the meat industry and an important nutritional resource.

      Imagine that there were more cattle feeders than corn growers; then the farm vote would not be promoting ethanol subsidies and the market and politics would be in harmony. But savy political pressure groups (corn farmers), ethanol subsidies and legistative mandates have been promoted as neccessary political solutions to both energy and environmental problems. Actually it is a farm income support at public expense. Let's call them what they are. Farm state senators benefitted by the obfuscation and the public is stuck with manifold unintended costs: loss of highway tax revenue used to create ethanol subsidies, higher state sales and income and property taxes to make up for the lost highway tax revenues or deteriorating roads and bridges, higher grocery prices for grains and meat, more greenhouse gasses in the atmosphere, and likely a negative energy balance exacerbating the cost of energy, trade balance, and value of the dollar.

      Also I am not convinced that ethanol production doesn't consume more energy than it produces when all the inputs are counted including energy needs for fertilizer manufacturing, crop irrigation, tillage, harvesting, transportation, distillation. Ethanol for fuels requires less productive marginal farmland to come into production, because the best land is already in production growing corn for traditional uses. The marginal land is less efficient and requires more farm inputs. Remember it's the marginal land that is added to corn acreage when corn to ethanol is subsidized!

      And what about all the pollution from these activities? Don't tell me ethanol is a clean fuel. Carbon is spewed at each stage mentioned above. Also CO2 is a major byproduct of the corn to ethanol manufacturing process. And finally when ethanol is burned for fuel it spews still more carbon into the atmosphere. States that mandate "clean burning ethanol" are exporting their polution to those states where involved in ethanol and inputs manufacturing and farming.

      Farm state senators jumped on the politically expedient ethanol subsidy bandwagon out of a wish to be popular while ignoring scientific and economic wisdom. It's funny how they can vow allegance to free markets and simultaneously approve of subsidies for pet industries where self interest reigns.

      Ethanol subsidies were originally claimed neccessary by the infant ethanol for fuel industry until it learned how to be more economic. This was hogwash too. The efficiencies were already fundamentally known in the longstanding industrial and liquor ethanol industries.

      Ethanol for fuels is a national political, economic, environmental and humanitarian catastrophe. It certainly should not be subsidized or mandated. Too many people are being injured for the benefit of the few. Sadly many small ethanol plants are closing even with subsidies and mandates.

      It is time to stop the insanity.

    3. Don Castella, Lincol says:

      The political reality alluded to above is that there are 21 farm states with 42 US Senators. Ethanol has one important quality… it is a domestic fuel. However, if it does not save energy on net analysis, even that important facet is rendered moot.

    4. Pingback: Morning Bell: Unintended Consequences of Wind Energy | The Foundry: Conservative Policy News.

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