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Biofuels or Bust
Volume 15, Number 21: 23 May 2012

In an important paper recently published in Renewable and Sustainable Energy Reviews, Jaeger and Egelkraut (2011) note that renewable energy promotion, and especially that of biofuels, "has become a policy priority in many countries," but they remark that "only recently has attention been drawn to some of the effects of biofuels on food prices, energy use, land-use change and carbon emissions." Thus, in an effort to "illuminate this information in ways that will inform good policy decisions," they proceed to examine biofuels from an economic perspective that "evaluates the merits of promoting biofuel production in the context of the policies' multiple objectives, life-cycle implications, pecuniary externalities, and other unintended consequences." And they do this by seeking answers to two key questions: (1) "How do the costs of biofuels compare to other options?" and (2) "Can biofuels be made available on a large enough scale to make significant progress toward those goals?"

When all is said and done (and there is a lot of saying and doing to get there), the two academics from Oregon State University's Department of Agricultural and Resource Economics state that their analysis "raises doubts about biofuels in relation to the specific objectives for which they have been promoted," noting that "as a means of reducing fossil fuel use and greenhouse gas emissions, domestic production of biofuels in the United States is found to be 14-31 times as costly as alternatives like a gas tax increase or promoting energy efficiency improvements." In addition, they find that "the scale of biofuels' potential contribution toward U.S. energy and climate policy goals is extremely small," stating that the contributions of the mandates of the Energy Independence and Security Act of 2007 to the underlying goals of reduced fossil fuel use and reduced greenhouse gas emissions "are negligible."

But the "most striking result," as they continue "may be the lack of evidence that biofuel policies can be expected to achieve significant reductions in greenhouse gas emissions, and that they may actually increase emissions." Summing things up, therefore, they conclude that "judged on the basis of reducing fossil fuel use and greenhouse gas emissions," their results suggest that U.S. biofuel policies "have been ineffective and highly costly, producing negligible reductions in fossil fuel use and significant increases, rather than decreases, in greenhouse gas emissions."

Isn't it amazing what a feel-good (but irrational) belief in an unverified climatic hypothesis can lead a supposedly enlightened populace (and their elected governmental representatives) to do.

Sherwood, Keith and Craig Idso

Jaeger, W.K. and Egelkraut, T.M. 2011. Biofuel economics in a setting of multiple objectives and unintended consequences. Renewable and Sustainable Energy Reviews 15: 4320-4333.