A new report by the International Trade & Agriculture Policy Council (IPC) examines the “early lessons” from U.S. and EU biofuels policy. The report’s language is bland, but the gist is clear. U.S. and EU policies are protectionist pork for the benefit of domestic farm interests. This vitiates their environmental value and discourages technological innovation.
Consider a few snippets:
…because biofuels are more expensive than fossil fuels, their utilization in the U.S. and EU depends on government incentives …
While these policies should promote biofuels that have an economic and environmental comparative advantage, the political reality is that domestic agricultural interests want policies that support the use of domestic feedstocks, regardless of energy efficiency or environmental sustainability.
The objective of promoting domestic production, therefore, may undermine efforts to rapidly develop the most efficient, sustainable energy resources.
In the absence of viable second-generation biofuels, incentives, tariffs, and standards that are structured primarily to promote domestic production of certain biofuels [e.g., corn ethanol] will retard the procurement and development of other more energy–and cost-efficient–biofuels.
Without an international consensus on what constitutes sustainable biofuels production, environmental concerns can conveniently be used to cloak protectionist interests.
Rising food prices … hit net food importing developing countries especially hard.