Grain’s agrofuel report

Grain, an NGO that supports poor farmers in poor countries, has published a large report that is getting a lot of publicity.

The press release is here, the report, a special issue of the magazine Seedling, is here, further reading here.

We begin with an introductory article that, among other things, looks at the mind-boggling numbers that are being bandied around: the Indian government is talking of planting 14 million hectares of land with jatropha; the Inter-American Development Bank says that Brazil has 120 million hectares that could be cultivated with agrofuel crops; and an agrofuel lobby is speaking of 379 million hectares being available in 15 African countries. We are talking about expropriation on an unprecedented scale…

Terraforming Terra

What should scare us most, climate change or hubristic schemes to mitigate climate change?

The unintended negative consequences of e.g. biofuel production from food crops are large, and include tortilla riots in Mexico because of rising food prices, destruction of rainforests in Indonesia to make way for palm oil plantations, and a general expansion of land under cultivation.

Here is a harbinger of things to come. A company plans to dump iron particles into the ocean in a 100 by 100 kilometer area near the Galapagos Islands in order to stimulate the growth of plankton.

In this case it is not the action of some mad scientist, it is business. The company is peddling “carbon offsets”.

What will be next? Why not seed the stratosphere with sulphur particles and claim carbon credits for that?

The biofuel fiasco and other well-meaning attempts to improve nature – think of the introduction of rabbits in Australia – should make us vary of climate change interventions.

How should we experiment with our poorly understood, nonlinear planetary systems? Very, very carefully.

Climate change is not as scary as climate change mitigation schemes that are driven by the combination of a powerful rent-seeking lobby, investors’ feeding frenzy, opportunistic politicians, and political correctness. Biofuel from food crops is one such scheme. There will no doubt be other even more ambitious schemes in the future. The danger is that they will do more harm than good, and that they will be almost impossible to stop because of the groups that benefit from them.

Update: BBC: Galapagos experiment sparks alarm.

Let me add that I don’t think that dumping 100 tons of iron filings in a 10,000 square kilometer area in the ocean is a cause for alarm. It is not going to trigger a new ice age, destroy the Galapagos ecosystem, or end intelligent life on Planet Earth. The main effect will be to relieve some rather naive people of some of their cash when they pay for carbon offsets.

The $40 billion handout

This week’s survey in The Economist of business and climate change explains why the US is likely to get a cap-and-trade system (as in the EU), rather than a carbon tax.

If the American governments adopts a cap-and-trade system […], it will hand out permits to pollute. They are, in effect, cash. According to Paul Bledsoe of the National Commission on Energy Policy, those allowances are likely to be worth in the region of $40 billion. Companies therefore want to be involved in designing those regulations. As Mr Rogers explains: “There is a saying in Washington: if you’re not at the table, you’re on the menu.” […]

A tax would be a better option. Unlike a cap-and-trade system, which stipulated the amount of CO2 that may be emitted and allows the price to vary, a tax sets a price and lets it determine the quantity emitted. […] But the prospects for a tax are not good. Business – particularly in America – is allergic to the very word; and the allowances which companies tend to be handed in the early stages of a cap-and-trade system have an obvious appeal to companies concerned about rising costs.

There is an academic discussion (e.g. here and here) about which is better, a carbon tax or cap-and-trade. But the discussion will remain academic. The $40 billion cap-and-trade allowance giveaway offers so many opportunities for patronage, lobbying, and campaign contributions from firms that stand to benefit that it is hard to see how a carbon tax could stand a chance. And on top of that, it is called a “tax”.

Quote of the day

From this week’s survey of business and climate change in The Economist,

Climate change is fashionable, and although fashion has the virtue of being able to transform the dull and worthy into the hip and happening, it is, by definition, transitory. Hollywood stars will probably get bored of their Priuses, and executives may become weary of mouthing green platitudes and move on to whatever branch of corporate social responsibility next catches the popular imagination.

Cargill CEO on biofuel and food shortages

From today’s Financial Times,

Cargill’s new chief executive has warned that the boom in renewable fuels could be derailed by a succession of poor harvests, intensifying upward pressure on food costs as land is devoted to energy-related production.

Gregory Page, a 33-year veteran of the world’s largest agribusiness group, reiterated his concern that biofuel mandates and other incentives will distort the allocation of land, with the potential to create food shortages around the world in the wake of “weather-related crop problems”.

“The big risk is that we are sowing the seeds of unintended consequences,” Mr Page said in an interview with the FT ahead of his installation as chief executive on June 1.

More here.