Food vs.fuel

Jun 2008

Eager to promote non-petroleum energy sources to reduce dependence on oil imports and slow global warming due to fossil fuel emissions, the United States, Brazil, and the European Union are promoting biofuels made from food crops. Ethanol production (mainly in the United States and Brazil) tripled from 4.9 billion gallons to almost 15.9 billion gallons between 2001 and 2007, according to C. Ford Runge, a professor of agricultural economics at the University of Minnesota. During that same period, biodiesel production (mainly for sale in the European Union) rose almost 10-fold, to about 2.4 billion gallons, although further expansion is now uncertain. Biofuel production has been prodded by government initiatives such as subsidies and tax incentives.
Questions about biofuels highlight the complicated structure of agricultural markets: prices reflect supply and demand, farmer decisions, weather, crop diseases, distance to market, and the price of alternative crops.
Now that food crops can be converted into fuels, a new factor must be considered - the link between the price of food and the price of petroleum.
The article is largely based on an interview to Lester Brown, an analyst of global resources who founded the Worldwatch Institute and now heads the Earth Policy Institute.

By: D. J. Tenenbaum

 
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