Sunday, February 18, 2007

Food vs. Fuel

http://cosmiclog.msnbc.msn.com/archive/2007/01/04/26743.aspx
This article explains how increasing ethanol production through corn can be misleading as the answer to America's emissions crisis. The Bush Administration’s “Advanced Energy Initiative” puts millions of dollars into the market to boost production of ethanol. Because the majority of ethanol is produced from corn, demand for corn increases and consequently the price increases. This creates a major problem for consumers buying corn for food rather than fuel. In the U.S., there are usually about 20 million people requiring food stamps each month because their income doesn't cover their food expenses. The demand for corn by ethanol distilleries is projected to increase from 53 million tons to anywhere between 60 and 140 million tons. There is a limited amount of agricultural land and by pushing these limits the farmers are severely harming the environment, which was the original motivation for turning to increased ethanol production. There is also the fact that the energy that goes into producing the ethanol is greater than the energy it yields. Overall, ethanol from corn is not an economical solution to the CO2 emissions from automobiles.

2 comments:

kfbare said...

Mary, despite your obvious bashing of the the Bush Administration, I do like this post! It makes sense, and it ties into the idea that most times when the government gets involved, they just don't help. I guess its an externality too, because while promoting an alternative to fuel with the intention of protecting the environment, the environment is still being harmed by the agricultural damage of increased production of corn.
Way to go Mar-dog!

KM said...

"obvious bashing", hey? Well - regardless, it's an excellent example showing how government initiatives can change things that they have no intention of changing (or...an EXTERNALITY!!). By changing a way to use corn, demand increases and price rises. Perfect. Never intended, but any economist could have told a politician that.

Great job. :)