Friday, October 06, 2006

Hooray for Ted Turner, the Biofuel Guy

Keywords: WTO; Doha Round; free trade; agricultural subsidies; biofuels; ethanol; biodiesel; input-output ratio of energy

Ted Turner just changed my way of thinking. I can’t often specify the very minute when I reversed my opinion on any subject, but this time I can. I was reading a speech that Turner had delivered to the Public Forum in Geneva on 25 September. In it he announced that he’s always been in favor of free trade, but that he’s alarmed about the of talks, which had collapsed only a couple of months earlier. Those negotiations had been started with the intention of increasing the benefits of to the developing countries — and if the attempt fails, warns Turner, it will be tragic. “If we give up on Doha, we’re giving up on fighting poverty.”

But why has the Doha Round collapsed? Because the rich and poor countries cannot agree on the issue of . “In the US, government farm supports are 16 percent of total farmer income; in Europe, it’s 32%; in Japan, it’s 56%.” The rich countries “spend about $2 billion every week on trade distorting tariffs and subsidies.” As a result, African cotton farmers make only about $400 a year.

Turner argues that the voting farmers in rich countries simply don’t know what’s good for them. They could relinquish these protective subsidies and tariffs and still prosper, but they are operating with an obsolete notion about their own business opportunities. The market for food and fiber is not growing fast; subsidies are required because there is overproduction of agricultural products. But there’s another product for which demand is growing fast, and which can be met by agriculture: . Corn, beets, and sugar cane can be made into ; palm, soy, and rapeseed can be made into biodiesel. Someone just needs to tell the farmers. The WTO should adopt policies that support agriculture for fuel — but they can do that only if the farmers recognize the economic possibilities of doing so.

A strong market for biofuels can potentially eliminate the need for farm subsidies in the developed world. At the same time, this will help the developing countries, for the price of oil is so high that their imports have driven them into poverty. For example, “Gambia now spends six times as much money on fuel as it does on health.” By producing their own fuels, such countries can improve the standard of living in their own country immediately, and build up their exports.

“By converting part of their output from food and fiber to fuel, they will be entering a market with higher prices and rising demand, and are more likely to attract the kind of foreign investment that can modernize their agricultural practices — and increase their food production as well. This is a critical point, because there should be no food vs. fuel debate. We can absolutely produce both — all that’s required is investment. Economic growth, especially in rural areas, will help developing countries meet their food needs more easily. The answer to hunger is not more food, it is less poverty.”

This makes perfect sense. I knew already that biofuels do not increase the , so the plan is environmentally sound too. Moreover, it is a scheme that can begin right away. We can use the existing cars, and pour the ethanol into cars from existing gas pumps, without having to wait until a whole new technology is invented.

But there’s one catch – and it had stopped me cold. I had not believed in adopting biofuels as a sound approach because I knew that it is not an energy-efficient scheme. Many crops used for ethanol have an output of only one unit of biofuel energy per unit of input fossil fuel energy. And, at the present, that means that its payoff is too low to be economical.

But there are other advantages that I’d overlooked. I had considered the production of ethanol to be a merely political boon to farmers, not an overall advantage. It’s a , not an energy policy.

Turner made me realize that this “boon to farmers” is immensely beneficial. It will help economic development, and will enable poor countries to produce their own fuel. In some countries, notably Brazil, it is already efficient, allowing for an output: input ratio of energy exceeding 5: 1. And Turner claims:

“the opportunities will get better as the technology improves — and that’s happening right now. In the future, we should be able to produce new fuels like cellulosic ethanol, a biofuel that could be extracted from virtually anything grown anywhere. We will be able to genetically alter biofuel crops to make their conversion more efficient. And we will be able to create better bio-refineries, increasing the returns on biofuel investment.”

So why had I discounted the importance of shifting to biofuels? The answer is one that makes a point that I am glad to make about the educational impact of television drama.

I had watched an episode of The West Wing that dealt with the politics of promoting ethanol production in corn-growing midwestern states. The writers indicated that it is not now an efficient source of energy, and that its supporters are merely trying to boost the income of farmers. This argument had convinced me. Nobody had pointed out the other effects that might flow from this – the possibility of eliminating farm subsidies and , thereby allowing “developing countries” to actually begin developing.

What we need is a show that puts out the whole larger story. If I could be convinced by a television drama, other viewers — including farm families — could be convinced by a different and better script. That’s what wants to accomplish, bless his dear, kind heart! And he’s the perfect person to innovate by creating a new show that makes that very point. Go for it, Ted.


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