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“Governments never learn. Only people learn.”     Milton Friedman

March 25, 2008

Gordon Brown Resists the EU’s Biofuel Targets

by Stephen Littau

The Guardian- Gordon Brown is preparing for a battle with the European Union over biofuels after one of the government’s leading scientists warned they could exacerbate climate change rather than combat it.

In an outspoken attack on a policy which comes into force next week, Professor Bob Watson, the chief scientific adviser at the Department for Environment, Food and Rural Affairs, said it would be wrong to introduce compulsory quotas for the use of biofuels in petrol and diesel before their effects had been properly assessed.

“If one started to use biofuels … and in reality that policy led to an increase in greenhouse gases rather than a decrease, that would obviously be insane,” Watson said. “It would certainly be a perverse outcome.”

Under the Renewable Transport Fuels Obligation, all petrol and diesel must contain 2.5% of biofuels from April 1. This is designed to ensure that Britain complies with a 2003 EU directive that 5.75% of petrol and diesel come from renewable sources by 2010.

But scientists have increasingly questioned the sustainability of biofuels, warning that by increasing deforestation the energy source may be contributing to global warming.

Watson’s warning was echoed last night by Professor Sir David King, who recently retired as the government’s chief scientific adviser. He said biofuel quotas should be put on hold until the results were known of a review which has been commissioned by ministers.

“What is absolutely desperately needed within government are people of integrity who will state what the science advice is under whatever political pressure or circumstances,” he said

Suspending my skepticism of the man made global warming phenomenon for a moment; the scientists make a very important point in this article about how government should think first before acting. The problem is that governments don’t think; people think. If the people of the U.K., the U.S. or anywhere else for that matter believe they can depend on the government making intelligent decisions on their behalf, this biofuels boondoggle is only the latest example of why those who would outsource their thinking to the government are mistaken.

Fortunately for the U.K., they have a prime minister in Gordon Brown who is willing to resist the knee jerk reaction to go along with the European Union and actually listen to scientists rather than seek out scientists who will tow the popular party line.

The prime minister made clear that Britain is wary of the target when he said last November: “I take extremely seriously concerns about the impact of biofuels on deforestation, precious habitats and on food security, and the UK is working to ensure a European sustainability standard is introduced as soon as possible, and we will not support an increase in biofuels over current target levels until an effective standard is in place.”

Unfortunately for us here on the other side of the pond, President Bush took the opposite approach: he caved. In 2007 President Bush signed legislation which would require the production of 36 billion gallons of biofuels by 2022. As Brad pointed out in his recent post on this subject, E-85 ethonal in particular wastes a tremendous amount of water.

What the biofuels proponents fail to tell consumers is that E-85 ethanol is horribly inefficient. As George Mason University Economics Professor Walter Williams points out, this particular fuel cannot be piped (because of pipeline corrosion from leftover water) but must be shipped by trucks and trains, damages engines not specifically designed for ethanol (again because of the leftover water), and is 20 to 30 percent less efficient than petroleum. Williams goes on to explain that to produce one SUV tank worth of fuel with E-85 requires 450 pounds of corn; enough corn to feed one person for an entire year!

Despite all of this, the politics is leading the way rather than the science and the free market. The farm subsidy lobby is very powerful in Washington in both political parties (and is apparently powerful in the EU as well).

And that’s really the dirty little secret. But for government subsidies, E-85 ethanol would have no chance of competing in the free market. Biofuel production displaces the basic economic resources of land, labor, capital, and entrepreneurial ability which could otherwise be used to better address the energy problem. British scientists are already thinking about the possible consequences of the EU’s biofuels policies. How much pain can be avoided if only policy makers will have the courage to listen before allowing such a disastrous policy from moving forward? The only way to solve the energy problem is for governments to get out of the way, allow innovators to innovate, and let the free market pick the winners and losers.

Hat Tip: Cato Daily Dispatch

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1 Comment

  1. good writing here. the writing is already on the wall re:ethanol. if you examine investor sentiment on publicly traded ethanol you’ll find that everyone knows the jig is up. i expect the subsidies to lose broad legislative support as early as the beginning of the next Congress.

    Comment by oilnwater — March 26, 2008 @ 8:32 am

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