Ethanol Subsidies: A “Scam” That Causes Starvation

by Hans Bader on April 7, 2008 · 4 comments

New York Times columnist Paul Krugman debunks the idea that converting from oil to ethanol will cut global warming:

“The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a ‘scam.’

This is especially true of corn ethanol: even on optimistic estimates, producing a gallon of ethanol from corn uses most of the energy the gallon contains. But it turns out that even seemingly ‘good’ biofuel policies, like Brazil’s use of ethanol from sugar cane, accelerate the pace of climate change by promoting deforestation.

And meanwhile, land used to grow biofuel feedstock is land not available to grow food, so subsidies to biofuels are a major factor in the food crisis. You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.”

Krugman, a liberal economist and critic of the Bush Administration, has long advocated government regulations and incentives to reduce greenhouse gas emissions.  But it is apparent even to him that ethanol subsidies are a destructive waste of money that will not reduce climate change.

Ethanol subsidies are also causing unrest and hunger in Egypt, fueling the rise of Islamic extremism, opposition to Egypt’s relatively pro-American government, and anti-Western sentiment.

Sal April 8, 2008 at 5:22 am

I don't know much about the environmental effects of ethanol. But I do know that there is one error in Krugman's column, which wrongly suggests that all three presidential candidates strongly support ethanol subsidies. In fact, John McCain opposes ethanol subsidies.

See the following link:

Paul Krugman, who wrote in Jan 2007 that "There is a place for ethanol in the world’s energy future — but that place is in the tropics" today tells his readers that even Brazilian ethanol is contributing to food shortages worldwide. Hmm, maybe ethanol is not such a great idea – who knew?

So how does this affect our assessment of the Presidential candidates? Here is Krugman:

"Oh, and in case you’re wondering: all the remaining presidential contenders are terrible on this issue."

Oh, and in case you are wondering – Krugman is lying.

Obama has consistently supported ethanol subsidies and voted in favor of those subsidies in a 2005 energy bill.

Hillary favors some subsidies but opposed the relevant 2005 amendment.

And John Sidney McCain has consistently opposed ethanol subsidies and voted on Hillary's (losing) side in 2005.

Yet they are "all terrible"? Or when Krugman refers to "all of the remaining Presidential contenders", does he expect us to understand that only Democrats are in contention?

From the Weekly Standard:

On ethanol Barack Obama is probably the worst of the three remaining candidates since he has supported subsidies and lauds corn-based ethanol in his current energy plan:

Develop the Next Generation of Biofuels: Barack Obama will work to ensure that advanced biofuels, including cellulosic ethanol, are developed and incorporated into our national supply as soon as possible. Corn ethanol is the most successful alternative fuel commercially available in the U.S. today, and we should fight the efforts of big oil and big agri-business to undermine this emerging industry.

Right, "big agri-business", as represented by Archer-Daniels-Midland, has been ruthlessly suppressing ethanol for years.

Hillary is not a star, but she at least voted against the ethanol subsidies in the 2005 energy bill (Barack favored it).

And McCain is in a category of his own. In the 2000 Presidential race he was vocally opposed to ethanol subsidies (and skipped the Iowa caucuses). He also was on Hillary's side in opposing the 2005 ethanol subsidies.

Dan April 24, 2008 at 4:31 am

And you might point out that not a lot of corn comes from Arizona or New York. A drive through Illinois in August will show you why Obama voted as he did. Go Nader!

diet January 9, 2009 at 12:27 pm

Hello, for a long time I read your blog, thanks for that that write interesting and useful posts.I consider that blogers it is possible to name many journalists. Good luck

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