Ethanol is officially a bust. Can we now get politics out of money, please?

By Tim Worstall , written on April 21, 2014

From The News Desk

We've long known that sticking corn into auto fuel tanks is an entire waste of effort in the fight against climate change. Food is for people not cars, just as an opening point, and David Pimentel proved a decade ago that brewing up booze that we can't drink but burn instead causes more carbon emissions rather than fewer. We've now got a further report pointing out that even just using the corn stover (ie, the bits of corn that we can't eat) doesn't do any better:

The findings by a University of Nebraska-Lincoln team of researchers cast doubt on whether corn residue can be used to meet federal mandates to ramp up ethanol production and reduce greenhouse gas emissions.

Corn stover -- the stalks, leaves and cobs in cornfields after harvest -- has been considered a ready resource for cellulosic ethanol production. The U.S. Department of Energy has provided more than $1 billion in federal funds to support research to develop cellulosic biofuels, including ethanol made from corn stover. While the cellulosic biofuel production process has yet to be extensively commercialized, several private companies are developing specialized biorefineries capable of converting tough corn fibers into fuel.

The researchers, led by assistant professor Adam Liska, used a supercomputer model at UNL's Holland Computing Center to estimate the effect of residue removal on 128 million acres across 12 Corn Belt states. The team found that removing crop residue from cornfields generates an additional 50 to 70 grams of carbon dioxide per megajoule of biofuel energy produced (a joule is a measure of energy and is roughly equivalent to 1 BTU). Total annual production emissions, averaged over five years, would equal about 100 grams of carbon dioxide per megajoule -- which is 7 percent greater than gasoline emissions and 62 grams above the 60 percent reduction in greenhouse gas emissions as required by the 2007 Energy Independence and Security Act.

Importantly, they found the rate of carbon emissions is constant whether a small amount of stover is removed or nearly all of it is stripped. With the right sort of farming the carbon from the stover that we're making into ethanol would instead become part of the carbon content of the soil, where it's very nicely stored away and doesn't become part of the emissions cycle. Leaving that carbon in the agricultural soil is an excellent method of locking it away forever. And other research suggests that pasture does this even better than either arable land or forest. Yes, a forest absorbs more while growing but once mature it is carbon neutral, while pasture keeps fixing carbon into the soil over time.

However, the point that interests me is how did we end up with the subsidization of something, on climate change grounds, when we've known for a decade that it actually makes the climate problem worse, not better? This is what I meant here: "One answer is to take the money out of politics to which I would say good luck. People have been trying this for a long time and as above, it’s not really been working, has it? The alternative would be to take the politics out of money." Of course it's impossible to entirely divorce politics from money. It's also true that there are things that pure free markets cannot deal with and that require politics and government if we're to have a solution. Climate change is obviously one of those.

However, there are market-friendly ways of trying to deal with these problems and there are politics-friendly ways. A market-friendly way would be a carbon tax, say, $1 a gallon on gas. If ethanol can compete with this, then why not? That is, as long as ethanol's own emissions are priced at the same rate. Instead, we got the politics-friendly method and vast agricultural combines now buy Senators to make sure their gravy train doesn't get derailed. Similarly, we got the CAFE standards on gas mileage of cars -- politics friendly again and actually what led to the very invention of the SUV in the first place. Because different standards were applied to vehicles based on a truck chassis, anyone who wanted a larger-engined vehicle bought a sedan body stuck on a truck chassis leading to extremely uneconomical vehicles. A higher gas tax, as in Europe, would have been a better solution. And it is notable that we Europeans drive smaller cars shorter distances as a result.

It's all of these stories that lead economists who study the climate change problem to insist that a carbon tax really is the solution. Because while it's not a pure free market solution, one of those just isn't available and this is the best we can do. And it keeps politics and detailed regulation as far away as possible from influencing who does or does not make money. Politicians don't like that, which is why we don't get these sorts of solutions. But the rest of us ought to like them and in a democracy isn't it about time we did get them?

[Photo by Steve Jurvetson]