Unintended consequences

The issue of biofuels is a great example of the law of unintended consequences. People insist that something is the answer, and that it must be supported, and they don’t realise what the flow on effects may be.

Biofuels have been touted as a partial solution to global warming, so governments passed laws mandating more biofuels must be used. I mean how could anyone object to more use of an energy source you can grow in the ground.

And so as the demand for biofuels increased by fiat, the supply was forced to increase. And hence farmers started growing more corn to produce ethanol for biofuels. Now again, who would object to that?

But wait. What did those farms use to produce? Oh minor stuff like wheat. So farms start producing less wheat. But people still want just as much wheat, so what happens? Oh yes the price of it goes up. And what does that mean? It means more people starve in the third world.

The Independent is a left of centre UK newspaper. Some useful quotes from this article:

Amid growing evidence that massive investment in biofuels by developed countries is helping to cause a food crisis for the world’s poor, the ecological cost of the push to produce billions of litres of petrol and diesel from plant sources will be highlighted today with protests across the country and growing political pressure to impose guarantees that the new technology reduces carbon emissions.

You see markets and incentives are very powerful things. The moment you tilt the field one way, it can have unimagined consequences.

The World Bank and the UN have, in recent days, expressed concern about the impact of biofuels on world food prices, sparking riots from Haiti to the Philippines. Gordon Brown, who has put the issue on the agenda at the forthcoming G8 summit, has also voiced concerns at EU level about deforestation and loss of habitats caused by biofuel production.

But who is to blame? Maybe those leaders who passed laws mandating biofuels?

But hey if a few extra hundred thousand people starve because of biofuels, isn’t that a price to pay for saving the planet from global warming?

Researchers at the University of Minnesota published a study in February this year which found that growing biofuel crops on converted rainforests, grasslands or peat bogs created up to 420 times more CO2 than it saved.

Whoops.

Hat Tip: Whoar