Summary
Biofuel is frequently billed as the temporary panacea for reducing dependence on fossil fuels. However, there is substantial evidence that production of biofuels using traditional ethanol (corn based) causes substantial environmental harm and contributes to higher food costs.
Analysis
Traditional ethanol production relies primarily on the use of corn. However, the use of cellulistic based ethanol may reduce some of these problems in the future.
In 2007 the Center for Agricultural & Rural Development at the University of Iowa produced the following statistics on the use of corn based ethanol in the United States:
- ethanol production consumed 20% of America's corn crop in 2006;
- capturing corn for the production of ethanol effects overall food costs including cheese, eggs, poultry, ice cream and pork;
- from 2006 to 2007 corn based ethanol production caused surging prices for corn and grains such as soybeans and wheat.
- in the aggregate American consumers face a total cost of ethanol of about $14B
Global effects would seem to reflect similar findings, impacting emerging economies and the overall poor dramatically as far as the diversion of corn and other ethanol contributors from the food supply. Not only does this reduce the staple from the food supply it has a disproportionate effect on the poor as far as the pricing structure is concerned.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
