In the Chamber -- Grant Mitchell's Blog

Ethanol

Posted 6/16/2008 by Grant Mitchell

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Isn’t interesting how now that farmers are finally getting a reasonable price for their grains that somehow people have to start finding reasons why there is something wrong with this? The argument is made that use of food grains for ethanol is tantamount to burning food and is the reason for pushing food prices up.

 

There is strong evidence that it is not ethanol that is responsible for escalating food prices. The culprits are more likely to be fuel prices and climate change which are drastically affecting food production in the world. Evidence is that food prices directly track fuel prices. And, of course, climate change means that floods and drought are killing crops and heat is meaning that much of the crop that does grow has reduced yield due to rising temperatures.

 

Some thoughts:

Those who are against action on climate change will use the ethanol food cost argument to ridicule climate change policy efforts by saying that it is proof that efforts to deal with climate change are ill conceived. The argument was used to diminish European efforts to create carbon credit markets. The first effort to do so did misprice the credits. However, we are launching into a new frontier of policy in an extremely complex policy area and it is to be expected that we will have to take steps, make some mistakes and then adjust. However, I firmly believe that we cannot make the adjustments if we do not take first steps. Now there is a thriving $92 billion market for carbon credits in Europe.

There is much effort to find non food source of ethanol feedstock. Ethanol producers want to find a cheaper feedstock than food grains too. There is much work being done on waste products, wheat straw or municipal waste, as source of ethanol feedstock. But, I think we cannot get there without taking this first step.
 

Isn’t interesting that some focus on farmers pushing up food prices, but nobody suggests that fertilizer producers who increase their prices to farmers are pushing up food prices. No one suggests that maybe rather than farmers having to adjust their activity to reduce food prices oil companies whose high prices push up food prices have to adjust their activity.

Yes there is grave reason to worry about the impact of high food prices, but it is not the responsibility of farmers to subsidize food. It bears on all of us to do something. It is the world’s responsibility and Canada should be a leader at that level in solving this problem.

On the other hand, I believe that he climate change crisis is of such severity that it is not a question of whether ethanol or carbon credits or any number of other possibilities can work…we have to do whatever it takes to make them work.


But you don’t get leadership from a government that holds a deep ideological belief that government has little to do beyond building a military and putting people in jail. They are of the belief I guess that if people want to fix climate change then people will fix it. This is much like saying that if people want to win the Second World War then people will win the Second World War. It would have been absurd then and it is absurd now.

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