The American: Is It Time to Stop Putting Food in Our Cars?

October 31, 2012

The ethanol mandate continues to do more harm than good — inflicting environmental damage, raising food prices, and distorting energy markets.

Two recent developments warrant a reexamination of the fuel ethanol issue.

First, on August 20, 2012, the Environmental Protection Agency (EPA) issued a call for comments on suspending the renewable fuel standard (RFS), sometimes known as the ethanol mandate:

EPA is seeking comment on letters requesting a waiver of the renewable fuel standard and matters relevant to EPA’s consideration of those requests. Governors of the states of Arkansas and North Carolina submitted separate requests for a waiver. Section 211(o)(7)(A) of the Clean Air Act allows the Administrator of the EPA to waive the national volume requirements of the renewable fuel standard program in whole or in part if implementation of those requirements would severely harm the economy or environment of a state, a region, or the United States, or if the Administrator determines that there is inadequate domestic supply of renewable fuel.

Second, though it has not played a feature role in the 2012 presidential election, both Governor Mitt Romney and President Barack Obama have weighed in on ethanol fuel, staking out different positions.

Our conclusions are that the ethanol mandate continues to do more harm than good — inflicting environmental damage, raising food prices, and distorting energy markets.

Ethanol and Food Prices

Projections estimate that by 2016, the United States will have diverted up to 43 percent of its cropland toward ethanol production. Since such land is normally used to harvest grain for feeding livestock, any diversions to ethanol production would require either changing the use of other land to growing grain or sharp increases in the cost of grain and meat. Given these ramifications, it is no surprise that a myriad of global organizations have opposed the biofuel mandate, including the World Trade Organization, Food and Agriculture Organization of the United Nations (FAO), International Fund for Agricultural Development, International Monetary Fund, Organization for Economic Co-operation and Development, UN Conference on Trade and Development, World Food Program, International Food Policy Research Institute, UN High Level Task Force, and the World Bank. In a recent opinion piece in the Financial Times, José Graziano da Silva, director-general of the FAO, also called for the suspension of biofuel use. He noted that “an immediate, temporary suspension of that [ethanol] mandate would give some respite to the market and allow more of the crop to be channeled towards food and feed uses.”

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