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Washington’s biofuel mandate is hurting poor people right now

The New Yorker is — mostly — a wonderful magazine. Although its left liberal leanings are hardly a secret, its cover illustrations are usually whimsical rather than political. The cover of its latest issue, however, portrays Santa Claus sitting on a tiny ice floe at the North Pole. Cute, but fraught with catastrophic implication (This past Christmas, the Suzuki foundation had a child-scaring fund-raising campaign based on the claim that Santa’s workshop was sinking).

In fact, the climate scare du jour relates not to the Arctic but to this summer’s extreme heat and drought in the U.S. Midwest, which is the worst since the mid-1950s and on a par with the Dust Bowl years of the Great Depression. However, while providing rich fodder for bloviation by the usual suspects, current weather is in no way outside the normal range, as three skeptical experts, MIT’s Richard Lindzen, Princeton’s William Happer, and American Geophysical Society fellow Roger W. Cohen, point out in a letter to The Wall Street Journal published Tuesday. How, they note, do you explain the greater heatwaves of the 1930s?

Which brings us back to The New Yorker. Last month, the magazine’s leading proponent of draconian climate policy, Elizabeth Kolbert, penned a piece titled “The Big Heat,” in which she suggested the drought was, at last, bringing home the reality of potential climate catastrophe to those redneck numbskulls and deranged conservatives recently more concerned with “Obama’s birth certificate.” She bemoaned, however, that neither the president, nor his electoral opponent, Mitt Romney, seemed eager to bring up global warming. “And so,” she concluded, “while farmers wait for rain and this season’s corn crop withers on the stalk, the familiar disconnect continues. There’s no discussion of what could be done to avert the worst effects of climate change, even as the insanity of doing nothing becomes increasingly obvious.”

Strangely, however, (I’m being ironic) Ms. Kolbert, while mentioning corn, failed to note the factor that is turning a weather-related problem into a global food crisis, a factor that is very much related to taking action on climate change: cornbased ethanol. What is greatly exacerbating the impact of the heat wave on food prices is Washington’s biofuel mandate, under which 40% of the corn crop winds up being turned into ethanol under a program of forced consumption. The policy — like every climate policy hatched to date — while claiming to help the poor of the future, has been captured by special interests, and is hurting poor people right now.

Biofuels policy in the U.S. — which was in fact installed in a big way under president George W. Bush — is also linked to “energy security.” When U.S. Agriculture Secretary Tom Vilsack was recently trying to defend the biofuels policy, the words “climate change” didn’t crop up. Instead he peddled the nose-stretching claim that gasoline might be up to US$1.30 a gallon cheaper as a result of the policy. And look at all the jobs created (if, that is, you used single-entry bookkeeping, which ignores the costs).

Canada, too, retains a biofuels policy that is even less defensible, because of the lack of any security rationale. The inevitably boondogglish nature of the policy, which also forces ethanol into gasoline, has recently made the news because of a proposed new ethanol facility in Finance Minister Jim Flaherty’s Oshawa riding. NDP transport critic Olivia Chow has complained that the project was approved by a harbour commission stacked with Mr. Flaherty’s political cronies. Certainly, if ethanol is designed to win the farm vote (which it is), the plot seems to be a bit lost in Oshawa, where votes may well be lost because of stout local opposition to the plant. Still, the Canadian policy is not causing the major global disruptions to which U.S. policy has already contributed. The U.S. is the world’s largest exporter of corn, soybeans and wheat, thus the impact of the drought on food prices has been greatly exacerbated by the biofuels mandate. When even the UN and environmental NGOs have jumped off the ethanol bandwagon, the fact that biofuel mandates refuse to die suggests how nakedly this is about electoral politics.

The policy — like every climate policy hatched to date — while claiming to help the poor of the future, has been captured by special interests

The UN has recently been joined in its demands that Washington dump its biofuel policies by major food manufacturers. The Grocery Manufacturers Association, which represents food giants Kraft and Kellogg, is asking the Environmental Protection Agency to reduce the biofuel requirement. Ken Powell, the chief executive of General Mills, has also spoken out against the policy, as has Peter Brabeck-Letmathe, chairman of Nestlé, the world’s largest food producer.

Predictably, the protests have been met with diversionary bafflegab from Beltway ethanol lobbyists, in particular Matt Hartwig of the Renewable Fuels Association. He said that a waiver of the mandate “will not make it rain.” But this unwittingly draws attention to the fact that the biofuels mandate was indeed part of a policy whose rationale and effectiveness were all too similar to those of a rain dance, but way more costly. It has particularly hit the poorest, who spend much more of their income on food, and rarely, if ever, get presents from Santa.