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Spring 2008
By Armando Vega
Staff Writer
These are complex times. Men peer into microscopes and try to discern this or that of nature’s mysteries, usually not for one second appreciating the connectedness of variables in the grand scheme of things.
For years scientists debated the merits of ethanol, wondering whether the reductions in vehicle exhaust were enough to offset the carbon emissions from manufacturing the product, particularly given the output of massive harvesting tractors, trucks for transport, and processing distilleries. Ultimately they decided that taken as a whole ethanol yielded a carbon-footprint 20% smaller than that of gasoline.
It happens that ethanol, always viewed with uncertainty, turns out to be an environmental disaster.
But in an age of grain surpluses and in which biofuels still represented a nascent technology having an inconsequential impact on global markets, it never occurred to anyone that the clearing of forests and other vegetation to make room for the growing market would release much more carbon into the air than would be saved through its use. As Michael Grunwald of Time magazine put it, “It was as if the science world assumed biofuels would be grown in parking lots.” It takes anywhere from one-hundred to four-hundred years for different kinds of ethanol just to break even on the carbon output it produces through deforestation.
“We’re all looking at the numbers in an entirely new way,” says the Natural Resources Defense Council’s Nathanael Greene, and the head of the UK’s Department for the Environment is calling mandates for greater biofuel usage “insane.”
“The situation is a lot more challenging than a lot of us thought,” says University of California, Berkeley, professor Alexander Farrell.
The problem? Using land to grow fuel leads to the destruction of forests, wetlands, and grasslands that store enormous amounts of carbon, and a groundbreaking new study in Science determined that with deforestation, corn-based ethanol and soy biodiesel produce twice the emissions of gasoline; and certainly not less as we were led to believe. The study’s author notes that there is three times as much carbon in plants and in the soil as in the air, and clearing vegetation and tilling the soil only serves to release that.
When corn-farmers in America divert a substantial portion of their output to ethanol rather than feed use, the available supply for food shrinks and the price of corn goes up. U.S. soybean farmers, seeing the higher prices, make a bid for the market, switching their grain of choice. In order to cope with the shortages facing the demand existing in our integrated global economy, farmers in Brazil (to take just one example), and the ranchers whose pastures they increasingly displace, tear into the Amazon, burning and sawing ancient forests harboring thousands of species of amazing and wondrous varieties of flora and fauna, in order to produce more farmland. Environmentalists are calling it the “savannization” of the Amazon. In the second half of last year alone, 750,000 acres of Brazilian rainforest, or the equivalent size of Rhode Island, was lost.
Says John Carter, Texas-born director of the advocacy group Alianca da, “You can’t protect it. There’s too much money to be made tearing it down. Out here on the frontier, you really see the market at work.”
Not every bushel of grain diverted toward energy use is replaced. Soaring food prices around the world, not just caused by ethanol production (rising standards of living across in parts of the world lead to greater beef consumption, which contributes astoundingly to grain consumption; and high oil costs in transportation, overpopulation and climate change are other culprits, with record droughts in parts of the world and a deep frost hitting China’s farms) but certainly aggravated by it, are causing riots from Mexico to Morocco, Senegal and Mauritania, and even spurring unrest in Pakistan and government crackdowns on rice-hoarders in India; additional riots have taken place in Cote D'Ivoire, Mozambique, Uzbekistan, Yemen and Indonesia. In Burkina Faso rioters resorted to burning government buildings, and in Cameroon a riot there ended up leaving 20 people dead. Many of these nations, as well as Ukraine, Russia, Egypt and Kazakhstan for example, have begun restricting imports in efforts to maintain control over their own food supplies, and Peru’s military has taken to subsisting its military on bread made from potatoes, a native crop, to cope with global wheat costs.
As not to be too alarmist, it’s important to point out that the consensus seems to be that at least this current spell of high food prices doesn’t appear to be a permanent problem, a foreboding of a world turned “Soylent Green”—the world’s agricultural community is expected to be able to cope, with several African nations in the process of planting high-protein, pest-resistant rice crops for example—but in the short-term even many economists are advocating government assistance for the poor to prevent global instability. And in the long-term, the greater yields extracted from our limited arable lands across the world will at times conflict with our own health, given the increasingly highly-processed nature of our foodstuffs, unless we’re able to control the skyrocketing human population growth rate.
Departments of agriculture at the U.S. and UN have determined that in a time where over 6.65 billion people are believed to inhabit the earth, the world wheat supply is at its lowest point in fifty years—just five weeks worth is currently on hand—and the supply of rice, the staple food of all Asia, is at a twenty-year low.
The U.N.’s World Food Program needs $500 million in additional funding and supplies to cope, calling the rising costs a global emergency, and U.S. AID, the Program’s largest donor, has been forced to cut tens of millions of dollars of commitments.
The ethanol it takes to fill up the tank in an SUV gobbles up enough corn to feed a person for 365 days. This year a third of nation’s corn supply will have been diverted toward ethanol production—a move obviously contributing to the world’s global supply shock of the commodity given that we’re easily the single-largest exporter of the grain. Besides, even if all of our corn and soybeans were converted into ethanol, it would be enough to offset just a fifth of our on-road fuel consumption; ethyl alcohol has just 2/3 the energy density per liter as gasoline. Aside from being environmentally disastrous, clearly ethanol is not the silver bullet toward energy independence some may think of it as.
In the struggle to catch up with America’s standard of living, countries all over the world are getting into the action. Mr. Grunwald reports that “Indonesia has bulldozed and burned so much wilderness in order to grow and harvest palm oil trees for biodiesel that its ranking among the world’s top carbon emitters has surged from 21st to third,” and Malaysia is running out of uncultivated land due to its own efforts.
Yet the U.S. has increased production of ethyl alcohol by a factor of five in the last decade and plans to do so again for the next decade.
It’s important to recognize that not all biofuels are the same; some have higher fuel-values or lower carbon footprints when harvested. Brazil is on track to achieve energy independence through the use of sugarcane ethanol, providing 45% of its fuel needs (all cars in Brazil are flex-fuel, a designation meaning the cars are able to run on both ethanol and gasoline) on only 1% of its arable land. In our interconnected, globalized world the impact of the corn-ethanol market is a much greater contributor to the acceleration of the deforestation of the Amazon than is the ethanol produced in Brazil’s own backyard.
This is an issue that has only recently come to light. It’s a rare scientist who also makes a good economist, so the unforeseen repercussions caught everyone by surprise. Unfortunately, though hopefully just a lag until the nominee becomes aware of the environment problems associated with corn-based ethanol, both Democratic candidates, and John McCain, continue to support the project as a solution to our energy-independence and climate change crises.
Last year the country subsidized the ethanol industry for $8 billion in order to produce 7 billion gallons of the biofuel, and Hillary Clinton’s plan would mandate 60 billion gallons by 2030 (we’re currently under a mandate the President signed in December heavily subsidizing the industry and requiring 36 billion gallons of biofuel by 2022). The corn-state of Iowa has so many ethanol distilleries in place in preparation of such shifts in development that very soon it will become a net importer of corn.
Ultimately, it all reflects on our short-sighted priorities and the entrenched interests in this country. In recent history the U.S. government has made no attempt at curtailing the assistance it hands to agribusiness.
Farm subsidies average $17 billion a year annually. Keeping in mind that tax-breaks for the oil companies are at $18 billion a year, and that the Federal Reserve doled out tens of billions of dollars to JP Morgan Chase in its acquisition of securities-firm Bear Stearns, and our governments similar hand-outs to corporate America, not to mention the trillions wasted for the war in Iraq…to paraphrase an old Washington aphorism, a few billion here and there starts to add up to real money.
It’s true that America, taken as a whole, is the richest nation in the world, but if we could truly sustain the kind of misguided spending we’re practicing now we wouldn’t be over $9 trillion dollars in debt (12 zeros). A trillion’s a dizzying number to wrap one’s head around, but to put things in perspective bear in mind that the Milky Way Galaxy doesn’t even contain quite HALF a trillion stars, according to current estimates. $10 trillion, near the level of our national debt, would be enough for every household in America to be able to purchase a $100,000 house. This is money that we, the American taxpayers, owe, to creditors around the world, and the referenced amount is just our national public debt; it doesn’t include state and local debt, and of course as we all know individual Americans are also personally heavily indebted.
The current system of farm subsidies started when FDR instituted large payouts to farmers in response to the crises of the Dust Bowl and Great Depression, but he had intended it to operate as temporary relief. Today farmers make up less than 1% of the population; and only 20% of those are full-time, whose incomes are solely dependent on farming.
Now farm incomes are at record highs, and the median farmer has a greater net worth than the median non-farmer by a factor of five. The subsidies are not equally dispersed: most go to just to growers of corn, soybeans, wheat, cotton, and rice, ensuring that 40% of all farmers receive all of the billions of dollars in subsidies.
Today’s farm events, rather than featuring Halloween pumpkin patches and hayrides, feature John Deere salesmen pitching 530-horsepower tractors and $410,000 combines, while Firestone markets seven-and-a-half foot tall tractor tires and ADM touts their financial services to assist farmers in playing the futures market with their commodities. Tech-heavy products such as automated tractor steering and spraying gadgets and drought-resistant corn are publicized. These are not the struggling, red-blooded and rustic Americans of yore.
We subsidize products like beef and high-fructose corn syrup in a time when our country’s experiencing an “unprecedented obesity epidemic,” as opposed to nutritious fruits and vegetables.
In spite of the images the farm lobby would like you to keep in mind, who project images of themselves as struggling common men with mud caked on their boots, according to Time magazine, in an article on the failings of our nation’s agricultural policies, “In reality, the top 10% of subsidized farmers collect nearly three-quarters of the subsidies, for an average of almost $35,000 per year. The bottom 80% average just $700. That’s worth repeating: most farmers, especially the small farmers whose steadfast family values and precarious family finances are invoked to justify the programs, get little or nothing.”
Subsidies to the wealthiest farmers, ostensibly delivered to achieve economics of scale (where say a farmer could produce 1,000 bushels of corn at lower cost than could two farmers each producing 500 bushels due to lower overhead, for example) also serve to concentrate wealth in rural areas at the expense of others. The Kansas City branch of the Federal Reserve conducted a study finding that counties most dependent on the agricultural subsidies “had the worst population losses and the weakest job growth,” and the Center for Rural Affairs of Nebraska determined that in 2002 alone the federal government “spent six times as much on subsidies for the state’s top 20 farmers as on rural development programs for the 20 counties losing the most population.” When big-time farmers do manage to produce greater output with our tax dollars, land-rents for the entire area rise as landlords seek to cash in on the increased value on the land.
“The system doesn’t serve any consistent public-policy goal. It only makes sense if the mission is finding ways to shovel money to farmers” says the director of Iowa State University’s Center for Agricultural and Rural Development.
It’s arguably a positive that we sponsor “research projects to expand their yields, restoration projects to clean up their messes, and flood-control and irrigation projects to protect and enhance their land,” as Time tells it, but do we really need billions a year on disaster aid, tax-funded purchase of surplus crops, tax-funded payments for crop-insurance, and market controls that hurt the consumer, given how well off the farmers receiving the aid are today? Our billions of dollars in subsidies for our farmers, and Europe’s for their farmers as well, enable rich nations to directly assist their agricultural sectors to the point where farmers in poorer developing countries, which are to an extent dependent on agricultural goods as they climb the economic ladder, can’t compete. “Free trade” indeed.
An Oxfam study found that eliminating our subsidies would raise incomes for West African cotton farmers 5.7%; we spent $3.3 in subsidies for our cotton farmers in 2005 alone, which is over half the size of the nation of Mali’s entire economy. Agriculture represents 45% of that economy, or nearly half their GDP, and their main agricultural product is cotton. How can a West-African nation, just inland of the Ivory Coast, compete in the global economy when the world’s largest and richest nation offers billions in direct assistance to its farmers? This is an agricultural economy we’re talking about…not manufacturing or service, not an exporter of high-tech goods or a locale of outsourced jobs. The U.S. makes more noise about “free markets” than any other country in the world, and we’re practicing the equivalent of the Pittsburgh Steelers going up against my nephew’s pee-wee football team…and cheating.
That hypocrisy on free-trade also hurts other sectors of our own economy. The World Trade Organization cited us for our cotton-subsidy infraction, and for years our refusal to cut farm-subsidies has resulted in the stalling of our exporting of products from firms “ranging from Microsoft to FedEx to Anheuser-Busch,” and even some export-oriented American farmers who can’t rely on subsidies.
The billions in increased funding for ethanol projects certainly aren’t going to help us wean farmers off the subsidies, aside from making lousy policy in and of itself.
There are many promising energy alternatives out there being developed even with the limited funding now available. Geothermal, variations of solar, ethanol derived from algae-farms, cellulosic biofuels and fuel from other biowaste, and even nuclear power; taken together all of these will help resolve our energy independence. There are astoundingly easy areas where America, the world’s largest carbon emitter and an unnervingly wasteful country, can increase its energy efficiency as well, and cap-and-trade and other market measures could also help clean up corporations’ mess. But for now it’s clear that corn-based ethanol is worse than a zero-sum game; it’s a dangerous red-herring that contributes to a tipping point in the cycle climate change toward critical mass, where the Earth’s temperature accelerates even more rapidly (through evaporating methane swamps, the melting of the polar ice caps exposing deep pockets of dark blue ocean water which will absorb much more solar energy, and increased use of temperature-control appliances). Let’s just hope the realization that ethanol is a part of the problem and not the solution hasn’t come too late, despite the momentum the political and economic forces it has unleashed possess.
