That includes most of the United States (click on link to see map) west of the 100th meridian, which runs roughly from Bismark, S.D. through Laredo, Texas.

To regular readers of Gristmill, this probably does not sound like news, but to others it may.

According to Kennedy (the full story can be found at ScienceDaily), a USDA Agricultural Research Service soil scientist and adjunct professor of crop and soil sciences at Washington State University:

“With cultivation, organic matter tends to decline in most places around the world. In the more than 100 years that we have been cultivating soils in the Palouse [the wheat-growing region of Eastern Washington, Northern Idaho and Northeast Oregon] we have lost about half of the original organic matter.

In terms of organic matter content, “according to Kennedy, soils in the Palouse should contain about 3.5 percent organic matter. In most farm fields in the region, however, it is now closer to 2 percent.”

As explained in the article, organic matter provides crop nutrients, improves the water-retention capacity of soil, and contributes to the formation of soil clods that help prevent wind erosion. Generally speaking, more moisture encourages more vegetation, which is the feedstock for the microbes that break down residue into organic matter.

Kennedy again:

A lot of people think residue is part of organic matter. But that is not correct. Organic matter is well-decomposed plant material and microbes. It is black and rich and gives soil its dark color.

The tillage system used to prepare the soil for planting is crucial to the conversion of residue to soil organic matter. As explained by Kennedy, “in no-till (direct seed) or one-pass tillage systems … at least a ton of residue per acre per year is needed to build soil organic matter over time.” In minimum tillage systems, decomposing roots, as well as the residues left over after harvesting, add to the soil’s organic-matter content. In no-till research plots at the Palouse Conservation Field Station, Kennedy found that the percentage of organic matter “increased from 1.9 percent to 3.6 percent over the course of 20 years.”

Kennedy thinks than one of the problems of multiple tillage is that it mixes the soil and residues too well — essentially, over-feeding the microbes. The microbes as a result consume the incorporated residue too quickly, releasing most of its carbon it into the air as CO2. Or, as Kennedy puts it, cultivated soil is like a “pig out” for microbes, who, in a very real sense, develop indigestion.

Thus, for the long-term health of the soil, leaving residue on the soil surface works best.

“It will tend to stay around longer, and the microbes will slowly invade it and convert it into organic matter with less lost as carbon dioxide,” said Kennedy.

As for proposals to harvest crop residues for the production of biofuels, Kennedy notes that

“You could remove the extra residue, but it still provides surface cover and will eventually become organic matter; this residue layer is especially important if you rotate with low-residue crops legumes and canola.”

Harvesting residues, in short, requires farmers to find other ways to increase the amount of organic matter in their soils. “‘We need to constantly replenish organic matter — so removing valuable residue, especially in areas with low rainfall, may not be the best practice’,” says Kennedy.

This is clearly vital research, especially given plans to produce massive amounts of cellulosic ethanol — in part from crop residues — in the future. However, the continuation of this research now looks uncertain. According to a report in Wednesday’s Capital Press, the WSU land and water conservation unit, for which Kennedy works, is one of many such units nationwide that are potential candidates for closure.

In response to the key question, “What do you think Congress should do now?” with respect to the Renewable Fuels Standard (which last December raised the minimum volume of biofuels used in the United States from 7.5 billion gallons a year in 2012 to 36 billion gallons a year by 2022, of which 15 billion gallons is expected to be supplied by “conventional biofuel” — ethanol derived from corn starch — by 2015), 42 percent of the participants in the survey thought that that the mandate should be eliminated to reduce ethanol production and use. Of the rest:

• 25 percent wanted the mandate to be partly eliminated to reduce ethanol production and use;
• 16 percent wanted it left unchanged;
• Six percent wanted it partly expanded to increase ethanol production and use;
• and 2 percent wanted it significantly expanded to increase ethanol production and use.

Nine percent were undecided, didn’t know what to answer, or refused to answer.

Even among people living in the Farm Belt, 25 percent percent said they wanted the ethanol mandate repealed entirely, and another 30 percent wanted it scaled back.

According to the NCPPR’s press release,

The poll was conducted by Wilson Research Strategies, which surveyed 802 voting-age adults who are likely to vote in the 2008 general elections. It included 37 percent registered Democrats, 30 percent independents, and 29 percent Republicans. It has a margin of error of plus or minus 3.46 percent at 95 percent confidence interval.

I’m not a statistician, but I gather that polls, if they are random and based on suitably stratified samples, can survey as few as 800 people nationwide and the results can still be considered representative. The results (see the end of the survey) do seem to be broadly representative of Americans in terms of gender, age, political affiliation, rural-urban split, educational level, etc.

This is not the first poll on ethanol policy conducted in the United States. The Renewable Fuels Association (the ethanol industry lobby) conducts polls regularly, and last October, released the results of a survey (PDF) of just over 1,000 adults which found that:

• 77 percent of Americans want the government to provide incentives to encourage refiners to reduce their use of oil and increase use of renewables.
• More than three-quarters (78 percent) maintain that increasing domestic ethanol production will help create new jobs and improve the economy in rural America.
• 58 percent believe more use of domestically produced ethanol will help reduce our dependence on foreign oil.
• Three-quarters (75 percent) of Americans view ethanol as somewhat important in reducing greenhouse gas emissions, with 41 percent viewing ethanol as extremely important in reducing greenhouse gas emissions.

and that:

84 percent of Americans believe something other than ethanol is at the root cause of rising food prices. Specifically, higher oil prices (46 percent), increased global demand (15 percent), and adverse weather conditions like drought (14 percent) were deemed to have a greater impact on food prices than ethanol production (seven percent).

If anybody knows where to find the actual survey questions, please post a link below.

Frankly, I don’t know what is going on here. I suspect that education — to use the term loosely — has played a part. Tellingly, in the NCPPR survey, pollsters first informed respondents that Congress approved a law in December that doubles the amount of corn ethanol required in the nation’s gasoline supply. They then explained that ethanol production is expected to use one-third of the U.S. corn crop this year, and more than that through 2015 unless the ethanol mandate is scaled back. A synopsis of the positions of both proponents and opponents of the ethanol mandate followed. Only after this prelude did they ask, “What do you think Congress should do now?” with respect to the mandate.

Meanwhile, over on this side of the Atlantic, where policy-makers are facing a more organized, and more-vocal opposition to the European Commission’s proposal to mandate 10 percent “renewable fuels” in road transport by 2020, José Manuel Barroso, president of the European Commission, for some reason decided to run an online poll on his website, asking visitors to express their opinions on the proposal. The poll was worded as follows:

Should the E.U. stick to its target to reach 10% biofuels by 2020?
O Yes
O No

I first became aware of the poll on May 30, when a contact at the European Federation for Transport and Environment sent around an “all points bulletin” email drawing the transport-policy community’s attention to the poll. As of that Friday morning, with around just 3,600 votes, the poll was running 95 percent in favor of the mandate. I suspect the high “Yes” vote at that time was because most of the visitors to the page had been members of the agricultural community. Apparently the EFTE’s efforts to get out the vote were highly successful, and by the end of the weekend, the earlier results had been completely over-turned and were showing a majority for “No." By the end of last week (the last time I saw the poll still displayed), the “No” votes outnumbered the “Yes” votes eight to one out of approximately 60,000 responses.

Then the poll suddenly disappeared from view. The ever-helpful folks at CAP Health Check noticed also, and yesterday, they posted a note titled, “Barroso’s disappearing biofuels poll.” Here is part of it:

At the last count, some 89 percent of the 60,000 respondents had voted for the E.U. to drop its biofuels targets, which have been widely criticised for taking food out of the mouths of the world’s hungry to put in the gas tanks of European vehicles. As of today, the poll has mysteriously disappeared from President Barroso’s website, and nowhere has the result been announced. Has the President of the Commission been taking election advice from Robert Mugabe? [Emphasis in the original.]

Ouch!

Just a caveat: Unlike the U.S. polls, President Barroso’s poll was not the least bit scientific. (It allowed multiple votes, for one: All one had to do was refresh the page.) But, apart from the mystery of the disappearing results, it does show — at the very least — the power of the internet and the surprising strength of Europe’s biofuel-policy critics.

Consumer subsidies (subsidized fuel prices), that is, not producer subsidies.

OK, what they actually agreed upon was “the need” to remove fuel-price subsidies. Eventually.

According to a report by Agence France-Presse, the five nations announced in a joint statement:

“We recognize that, moving forward, phased and gradual withdrawal of price subsidies for conventional energies is desirable. Undistorted and market-based energy pricing” would help “enhance energy efficiency and increase investment in alternative sources of energy.” They said that subsidies “should be replaced wherever possible by better targeted policies for intended beneficiaries. Such a move “could also lead to reduction in the government cost and greater integration of the domestic and global energy economies."

India and China signaled they were in no rush, however. Indeed, India’s ambassador to Japan, Hemant Krishan Singh, went so far as to say that it was not “accurate or correct” to describe the statement as an agreement to remove subsidies now. “This matter was raised in the meeting and responses and comments were exchanged. But no, there was no agreement to remove subsidies,” he said.

Zhang Guobao, vice chairman of China’s National Development and Reform Commission, also would not commit to any time frame for reducing his country’s subsidies.

Despite the wiggle-room in the negotiated statement, the very fact that big oil-consuming countries are starting to talk about such a taboo subject as oil subsidies is good news. Many developing economies heavily subsidize the price of petroleum fuels, ostensibly to ease the burden on the poorest members of society. Various studies have showed that, in fact, it is often the higher-income groups and middle classes that reap the biggest benefits from such subsidies. With crude-oil prices soaring, however, many of those countries — especially the net petroleum importers — are finding that they simply do not have the financial resources to keep resisting the market.

Several large countries, including India, Indonesia and Malaysia have recently been forced to raise their fuel prices, triggering large anti-government demonstrations in the first two countries. As Akira Amari, Japan’s energy minister and host of the talks, acknowledged, removing subsidies can be “a painful decision.”

More-developed countries, like the United States and Japan (which imports nearly all of its oil), and the major multilateral lending institutions, like the IMF and the World Bank, have been trying to convince developing countries to reduce and eventually eliminate general fuel-price subsidies for many years. The implication is that developed countries do not subsidize the consumption of petroleum products.

None that I know of directly subsidize or regulate gasoline or diesel prices so as to force those prices below international prices, and most tax these fuels heavily at the pump. But there are many more subtle ways that developed countries indirectly subsidize the use of petroleum fuels. If developed countries are really concerned about eliminating all forms of government support that directly or indirectly encourage the consumption of petroleum products, then they might want to re-examine some of their own policies.

These include:

• Tax policies that encourage employers to offer their executives company cars and free fuel in lieu of higher salaries.
• Similar policies that encourage employers to provide free parking for their employees’ vehicles.
• Policies that keep fuel taxes down below the level required to maintain road infrastructure, so that general funds have to be tapped.
• Fuel-tax exemptions and even subsidies for farmers and fishing boats.
• Regulatory loop-holes, and in some countries subsidies and government-purchase preferences, that encourage sales of large, fuel-guzzling flex-fuel vehicles independent of whether or not the vehicles ever use a drop of ethanol.
• Policies that, effectively, subsidize complements to petroleum fuels (e.g., ethanol blended with gasoline).
• Programs that subsidize commercial air service to small airports.

In short, let us hope that the Aomori Accord will encourage all governments — and not just governments of developing countries — to take a long, hard look at a whole host of policies, programs and regulations that favor and perpetuate technologies, and patterns of production and settlement, that work against the mutual goal of reducing the world’s consumption of petroleum products.

Many others do not like the idea, but seem to feel that it is a price worth paying in order to preserve solar investment tax credits as well as production tax credits for large-scale renewable projects. (A national Renewable Electricity Standard has already been dropped from the bill.) Some of those people then argue, in effect, we can always go back and repeal the RFS next year.

Next joke.

As I have argued on a number of occasions, once a minimum use of a product becomes mandated, there is almost no chance of rolling it back, especially once investments are made to meet it.

But if you, gentle readers, think I’m exaggerating the problem, then I encourage you to print off a very handy (and accessible) report, Corn-Based Ethanol in Illinois and the U.S., recently published by the Department of Agricultural and Consumer Economics of the University of Illinois. In Chapter 9 of the report, Prof. David S. Bullock explains “Ethanol Policy and Ethanol Politics” (PDF) in the United States in very clear, straight-forward terms. Here is what he says toward the conclusion of the paper:

Another question is how flexible factors are in moving out of ethanol production and into an alternative use. It is crucial for policy makers to understand this concept and its implications. Some factors are reasonably flexible — the transportation trucks and rail cars can be moved to alternative activities with relative ease.

But other factors are considerably less flexible. It would be difficult to move some forms of labor and know-how out of the sector, especially in any kind of short run. Ethanol factories are built in rural communities, and thus one of the political justifications for providing subsidies to ethanol is to create factory jobs in rural areas. If workers and managers own homes in a small town, then when an ethanol plant shuts down it may be impossible for them to sell their homes without a huge loss in equity, and therefore they may not be able to get out of the town that they moved into earlier, when they anticipated that ethanol markets would remain strong, and government policy would remain favorable, for many years to come.

Even less flexible are the buildings and machines that make up the ethanol plant itself. Clearly it is not generally feasible to move the buildings. And many of the machines used in an ethanol plant are not very useful in other industries.

This irreversibility of bringing factors into ethanol production causes the subsidy policy to act like a political ratchet. It is easy enough politically to cause the subsidy to go up: corn farmers and ethanol producers influence their congressional representatives, and everyone refers to energy self-sufficiency and rural job creation. But once in place, it may well become politically infeasible to bring the subsidy back down. For, after the economy is finished building new ethanol factories, in response to the subsidy, what then?

We’ve already argued that when the building process is through, many ethanol factories will not be making large profits. The factories and their workers, then, would be quite vulnerable if, for example, any of the following transpired: 1) the government decided to remove or lower the subsidy, 2) world oil prices fell and remained low for an extended period, and/or 3) droughts led to poor corn harvests in consecutive years. In any such circumstance, it will be extremely difficult for government to tell factories that are losing money and workers who are losing jobs, “Sorry, but that’s the free market.” Rather, it will be politically expedient to raise subsidization levels. Thus, a major concern is that ethanol subsidies are relatively easy for governments to get into, but very difficult for governments to get out of. [My emphasis]

There are some who argue that the high prices for “program commodities” generated by support for biofuels will smooth the way for major reforms of agricultural policy. Well, one such reform, proposed by Senator Richard Lugar, has already been defeated. Senator Lugar is a big proponent of ethanol, by the way, but IMHO on the issue of farm subsidies he gets it right. (See his remarks in yesterday’s Fort Wayne Journal Gazette.) Interestingly, here is what a farmer interviewed about the Lugar amendment had to say on the matter:

Grain farmers were concerned that Sen. Richard Lugar’s amendment to the farm bill would provide too little protection if a drought or other disaster damaged crops, Woodburn farmer Roger Hadley II said. If the proposed crop insurance program had been tied to past revenues, it would not reflect the high prices and high production costs farmers are dealing with today, Hadley said. Demand for ethanol and other biofuels increased crop prices substantially in the past two years, but farmers need the additional income to cover the rising cost of fertilizer, seed and farmland. If a drought slashed farmers’ harvests in half, he said a crop insurance program based on past revenues could not cover current costs. [My emphasis]

So, once again the status quo rules. We’ll still pay for farm subsidies plus ever-increasing subsidies for biofuels.

According to the firm’s website:

Unlike public opinion polls, this survey focuses on the views of professionals in position to make or influence large decisions in their organizations and society. This focus, together with the survey’s large global sample and good balance of respondents across all geographies and sectors, makes this survey unique.

A bar chart showing the results in graphic form is found below the fold.

Among the survey’s findings:

• Decision makers rate biofuels produced from food crops like corn as having the least potential of 18 technologies for reducing carbon emissions over the next 25 years.
• Decision makers put surprisingly high emphasis on the protection of biodiversity and having sustainable development guide climate actions, while putting relatively low emphasis on cost effectiveness.
• Decision makers expect fully half of their organization’s reductions of carbon emissions over the next decade to come from energy demand management or efficiency improvements.

Another interesting result is the relatively high ranking given to tidal and wave energy. Tidal energy was first exploited decades ago, and it has been talked about ever since. Yet there are still only three tidal-barrage plants operating in the world. Perhaps the new designs, which are more like underwater wind turbines, hold more promise.

I am also curious what GlobeScan means by “human-powered vehicles.” Does that mean, like, bicycles? If so, am I the only one surprised that they would rank third from the bottom, polling only slightly ahead of large-scale hydroelectric plants and first-generation biofuels?

That first-generation biofuels from agricultural crops ranked so low is both unsurprising and surprising — unsurprising to anybody familiar with the debate on life-cycle GHG emissions associated with first-generation biofuels, but surprising because it should make one wonder how truly the polled professionals are “in [a] position to make or influence large decisions in their organizations and society.” If they were, then why do politicians keep supporting first-generation biofuels so enthusiastically?

All it takes, aparently, is a visit by a key policy maker and his or her staff to a Farm Fest. According to the San Francisco Chronicle:

[House Speaker Nancy] Pelosi’s role on the farm bill will be critical heading into next months’ negotiations with the Senate to produce a final bill. [House Agriculture Committee Chairman Colin] Peterson said he believes Pelosi was won over to farm programs during a visit to his district for an annual Farm Fest.

“She just had a great time, and her staff did, and they bonded with the farmers and she was eating pork chops on a stick and riding around in an ethanol four-wheeler,” Peterson said. “And that had a lot to do with her being as engaged and helpful as she was in finally getting the bill through.”

Eating pork chops on a stick while riding around in a flex-fuel SUV.

Hooooooo-wee! Where’s that silly little Farm Bill, Senator? Sign me up!

Over the last two years, Bates has written extensively and persuasively on a wide range of topics, particularly on environmental and energy policies, and climate change.

In his latest post, about biofuel policy, Bates states:

Instead of asking how to reduce transport emissions from road fuel substitution, we should be asking how to make use of land to tackle climate change in the most effective way possible. In coming up with the biofuels targets, policy-makers have asked, and answered, the wrong question. It’s not hard to see why … transport policy-makers have to find transport policies. The results: waste, damage and lost opportunities to do better …

He starts off:

There are two main problems with biofuels:

(1) they are a very expensive way of saving carbon, compared to the alternatives (at least 10x the going rate in the EU ETS) — see chart and click to view in detail;

(2) there are substantial negative ‘sustainability’ impacts, arising from changes in land use for biofuel production — for example deforestation, water impacts or land shortages.

Beyond rhetoric, we appear almost indifferent to these. Despite these weaknesses, we now have extremely powerful and expensive policy instruments devoted to promoting biofuels.

In the chart above (click here for a full-page version), Bates put together data from Table 30 of the UK government’s Biomass Strategy “Working Paper 1 – Economic analysis of biomass technologies” (PDF), from May of this year. It shows that the government’s Renewable Transport Fuel Obligation (RTFO) is focused at the most expensive end of the range of biomass options. "In fact," he writes, “these are at the expensive end of all carbon abatement technologies — perhaps 10 times the going rate in the EU Emission Trading Scheme.

He then asks:

Why, you might well ask, is the government acting so irrationally? Forcing very large sums into inefficient policy instruments for little environmental gain. I think this illustrates an important failing of climate policy. Obviously this has its origins in the EU (in which the UK is an accessory to poor decisions taken by the Council), where the biofuel targets have been set at arbitrarily high levels. I suspect the idea of biofuels targets have come from policy-makers asking the question: “how do we reduce the emissions from transport?” They conclude that fuel substitution is one of the best options they have then designed a mechanism to make that work — but by indiscriminately subsidising a change of land-use in Europe and beyond. Perhaps they feel an implicit sectoral burden sharing regime at work … that transport must somehow take its “fair share” of the reductions compared to power station, chemical plant and homes. Of course, the climate is indifferent to burden sharing … it doesn’t care where the reductions come from. Reading the Energy White Paper [Transport section], you can feel the implicit burden sharing in the text:

For transport to reduce its climate change impacts we need to enable smarter, more energy efficient use of transport and we need to reduce carbon emissions by bringing about changes in the types of vehicles and fuels we use.

The biomass strategy goes further [UK Biomass Strategy p7] — it recognises that transport biofuels sit at the expensive end of a hierarchy of biomass options, but then concludes it would be simplistic to think about it like that …

… despite their higher cost of carbon, transport biofuels are essential to carbon savings in the transport sector for which there are few other options in the short to medium term.

But this is the simplistic thinking … we should get the emissions reductions where lowest cost and least damaging overall. The issue is that no-one has the policy brief to optimise these resources: but there is plenty of muscular transport policy-making going on — trying to do the wrong thing well, and establishing a meaningless policy priority.

Bates then goes on to argue for looking at land from the perspective of how its management contributes to climate change, rather than from the narrow perspective of how it can serve an arbitrary set of biofuel targets.

There is more to his argument, but I’ll leave readers with one of my favorite passages:

[T]he stand-by excuse of technology-promoting scoundrels everywhere is that we need big subsidies now to prepare for the brave new dawn tomorrow. I agree you need an innovation system — but it’s not obvious that you get to cheap second-generation biofuels via lavish subsidies for a very large uptake of expensive dead-end first generation biofuels. For now, the best transport responses are fuel efficiency and changes in driver behaviour. Longer term it’s about mobility demand and the physical layout of our lives. [my emphasis]

By the way, Clive Bates is about to become the Head of the UN Environment Programme in Sudan. I hope he still finds time to maintain his blog.

Ooh la la, what in the world is going on?

This news first appeared in an article published in Britain’s Guardian newspaper. It has since been picked up both by Biopact (who, naturally, sees it as a great opportunity for increased imports of ethanol from developing countries) and the Competitive Enterprise Institute’s “Facts About Ethanol” web site. (Ethanol makes for strange bedfellows.)

To quote from the original article:

The French ethanol sector is heavily reliant on subsidies in the form of a lower TIPP [Taxe Intérieure de consommation sur les Produits Pétroliers] fuel tax, which makes the fuel competitive with gasoline at fuel pumps.

“The talks (on upping the TIPP tax) are well advanced in the framework of inter-ministerial discussions and are causing great concern,” said Alain Jeanroy, co-ordinator of the ethanol industry group.

No one from the relevant ministries was immediately available to comment.

…

Ethanol currently benefits from a 0.33 euro per litre discount when sold at petrol pumps, but that amount could soon be halved, said other industry sources.

“When taking into account commitments taken with industrial investments of close to 1 billion euros and the recent start-up of production units, we would not understand (such a move),” Jeanroy said.

France produced 235,000 tonnes of ethanol and 631,000 tonnes of biodiesel in 2006, the French farm ministry said.

France decided to go beyond the EU target and incorporate 5.75 percent of alternative fuels by end-2008, seven percent by end-2010 and 10 percent by end-2015.

Not entirely unrelated, there is another alternative to gasoline in France that is attracting increasing attention: compressed air. According to an article in the International Herald Tribune published on October 24, Guy Nègre, a Frenchman who founded Moteur Developpment International (now MDI Enterprises), in Carros, France, has recently signed a 20-million-euro (about $28 million) agreement with Tata Motors, India’s largest automaker, to deliver vehicles that run on compressed air in hopes of putting them on the market in India by 2009.

The compressed air that drives MDI’s cars is stored in carbon-fibre tanks located under the chassis. (A video featuring its cars can be seen here.) Other air-powered cars are under development using different systems, and the Scuderi Group, of West Springfield, Mass., is working on a hybrid engine design that compresses air and burns petroleum fuel in separate cylinders and uses some compressed air to extend the petroleum engine.

MDI’s cars are still prototypes, and look like they would not survive even a parking-lot accident with a Hummer. (I have yet to be able to determine whether they will be outfitted with airbags.) And it will be years before Americans see such vehicles on the streets. But lets hope that, in the meantime, governments outside La francophonie stop acting as if ethanol is the only possible answer to future transport needs and start applying more broad-based policies, like a carbon tax, to encourage alternatives to petroleum fuels.

The big news north of the (U.S.) border is that Québec’s government has decided that there is no future in corn ethanol.

As explained in an article posted on Canada’s Cyberpresse website, back in May 2005 Québec’s then Minister for Agriculture, Yvon Vallières, gave a green light, “for obvious economic and ecological reasons,” to the construction of the first plant to manufacture ethanol from corn kernels, in the town of Varennes.

However, during an emission of the Enquête television program (click to view) on Radio-Canada last Thursday evening, Québec’s Minister for Natural Resources, Claude Béchard, promised that the 120-million-litre-per year Varennes plant would be the first and the last of its kind. “It is necessary to turn to other [feedstock] sources,” he said. No other ethanol factory based on corn will be built in Québec.

On Sunday, a leader in one of Montreal’s newspapers, The Gazette expressed satisfaction with the decision, declaring, “Backing away from ethanol makes sense.”

This impressive reversal of policy, which seems to have pitted the ministries for Agriculture and the Environment against each other, occurs at the time when more and more voices around the world — and in Québec — are speaking out against the diversion of corn for transport fuel.

Québec itself has precious little good arable land (mainly along the St. Lawrence River), and not everybody in la belle province is happy with devoting an increasing proportion of it to grow corn for biofuels. Québec’s Minister of Sustainable Development, Environment, and Parks, Line Beauchamp, has also expressed concerns over “the environmental impacts related to the intensive cultivation of corn.”

Moreover, earlier this year, an expert panel convened by Health Canada to look at the effects on air quality of ethanol blended fuels concluded that, well, it was pretty much a wash:

Some of the observed air quality benefits of ethanol-blend fuel include reduced emissions of carbon monoxide (CO) and exhaust hydrocarbons, and the displacement of some air toxics such as benzene. However, advances in emission control technology over the years have reduced the relative advantage of ethanol as a cleaner fuel. In addition, there are some concerns over potential human exposure to certain other emissions related to the use of ethanol-blend fuel (e.g., ethanol, acetaldehyde, formaldehyde, peroxyacetyl nitrate).

For now, Québec will retain its regulation that all gasoline contain 5 percent ethanol (by volume) by 2012, and the owner of the Varennes plant, GreenField Ethanol, will still benefit from various federal (up to C$0.10 per litre) and provincial (up to C$0.185 per litre, but only if the price of crude oil drops) production subsidies for ethanol. The province will also continue to support pilot projects to produce ethanol from cellulose material (Québec produces a lot of forest waste) and household waste.

The Gazette is not impressed, however. “Instead of flirting with absurd five-per-cent solutions,” it writes, “Québec should put its efforts into conservation. The way to reduce emissions is to reduce use, and higher fuel prices and tougher efficiency standards will accomplish that.”

Last month, we issued what we call our “Synthesis Report,” our overview of government support for biofuels in selected OECD countries. Coming out right on the heels of the so-called “OECD Paper” (actually, a discussion document for a meeting of the Round Table on Sustainable Development, to which I contributed), “Government Support for Ethanol and Biodiesel in Selected OECD Countries” hasn’t yet attracted much attention in the press. It is rather dense in parts, I’ll admit. But it contains some crunchy numbers.

For example, we estimate that total support to biofuels in OECD countries was at least $11 billion in 2006, with most of that provided by the U.S. and the EU. Expressed in terms of dollars per greenhouse-gas emissions avoided, the levels vary widely, but in almost all countries, whether for ethanol and biodiesel, they exceed $250 per tonne of CO2-equivalent. That is several multiples of the highest price of a CO2-equivalent offset yet achieved on the European Climate Exchange.

Then, last week, we released our long-awaited report on “Government Support for Ethanol and Biodiesel in the European Union” …

The release of the EU report took place at a luncheon hosted by GLOBE-EU, an organization of European legislators with an interest in environmental policy. Some 11 Members of the European Parliament (MEPs) showed up to the luncheon meeting, as well as at least one reporter, and of course a member of the European Commission. The corresponding story, posted by the Inter Press Service, can be read here. (And for those of you who understand Swedish, you can check out the news coverage on SVT by clicking here and scrolling to 19’25″.)

The reaction from the European Commission representative (Directorate General for Agriculture) was one that we did not expect: the EU’s policies supporting (mainly domestically produced) biofuels have nothing to do with supporting the incomes of crop farmers, he insisted. Truly! Our guess is that the Commission, seeing that Brazil is now starting to challenge the U.S.’s ethanol support policies at the WTO, may feel the need to maintain a consistent story that their biofuel subsidies are all about, and only about, energy and the environment.

Even if one were to accept that the EU promotes biofuels primarily as a way to reduce greenhouse-gas emissions, it is an expensive policy. The study finds that transfers (i.e., subsidies and related support) per tonne of CO2-equivalent removed in 2006 were between 575 and 800 euros for ethanol made from sugar beets (and far higher than that for ethanol made from grains), around 215 euros for biodiesel made from used cooking oil, and over 600 euros for biodiesel made from rapeseed. So, as we found for the United States, EU subsidies to biofuels also fare poorly in terms of cost effectiveness.

Here, in brief are the recommendations we make to the EU and the Member states:

• Resist instituting new consumption mandates for biofuels, at least without first undertaking a thorough examination of the costs and benefits of doing so.
• Eliminate all tariffs on imported fuel ethanol.
• Avoid providing new specific subsidies to the industry, and move to re-instate fuel-excise taxes on biofuels where this has not already been done.
• Improve the information available on support provided to the biofuels industry, and the effects of such support, as well as on production, capacity and trade in biofuels.
• Put in place an evaluation process that can thoroughly assess the cost-effectiveness of each Member State’s support policies in attaining all three of the objectives behind the EU biofuels policy.

Meanwhile, unbeknownst to us at the time we were working on the EU report, the International Food & Agricultural Policy Council (IPC) was also working on a report critiquing U.S. and EU biofuel policies. That report, “An Examination of U.S. and EU Government Support to Biofuels: Early Lessons,” by Charlotte Hebebrand and Kara Laney, was released yesterday. It is nice and concise. Here is a quote from its executive summary (italics are in the original):

U.S. and EU policies that shelter domestic agriculture risk limiting efforts to expedite cost-effective and sustainable uses of biofuels.

Although energy demand is increasing most rapidly in emerging economies, the United States and the European Union remain by far the largest energy consumers. The transport sectors in these economies rely on oil, but this comes with the price of high greenhouse gas emissions. Biofuels, produced from agricultural feedstocks, have come to the forefront of the energy agenda on both sides of the Atlantic as a means of decreasing reliance on oil. However, because biofuels are more expensive than fossil fuels, their utilization in the U.S. and EU depends upon government incentives. While these policies should promote biofuels that have an economic and environmental comparative advantage, the political reality is that domestic agricultural interests want policies that support the use of domestic feedstocks, regardless of energy efficiency or environmental sustainability. The objective of promoting domestic production, therefore, may undermine efforts to rapidly develop the most efficient, sustainable energy resources.

The absence of internationally agreed and scientifically valid biofuels standards will further increase the disproportionate focus on domestic production. Moreover, a lack of clarity about whether and, if so, how international trade obligations apply to the biofuels sector could strengthen this tendency. An overemphasis on domestic production by the United States and the EU risks trumping their policy objectives to improve energy efficiency, increase energy security, and reduce environmental degradation. Additionally, given the size of their economies, the ramifications of insular policies could have significant ripple effects worldwide, particularly for food and feed prices and for biofuel and agricultural opportunities in developing countries.

I won’t repeat all of the IPC’s observations and recommendations here, but list the first three by way of a teaser:

Governments must clarify their intent for supporting the biofuels industry:

• It is unrealistic to view biofuels alone as a panacea for achieving energy security, reducing GHG emissions, and establishing new markets for politically powerful agricultural sectors
• Energy security should not be mistaken for energy self-sufficiency.

This intent should be mirrored in the setting of EU and U.S. mandates, tax incentives, and tariffs:

• In the absence of viable second-generation biofuels, incentives, tariffs, and standards that are structured primarily to promote domestic production of certain biofuels will retard the procurement and development of other more energy — and cost-efficient — biofuels.

And the reports keep on coming. Just today, the National Research Council has come out with a study that concludes that if projected increases in the use of corn for ethanol production occur in the United States, “the harm to water quality could be considerable, and water supply problems at the regional and local levels could also arise.”

Another group, the Meadowland Project, has produced a rather dystopian-optimistic set of future scenarios for the rural northern Great Plains region in 2050. Here’s a taste of two of the four:

There’s No Place Like Home

This is a world in which a long-term drought caused by climate change has a catastrophic impact on the robust ethanol industry, which leads to economic and social collapse within the northern Great Plains. This collapse and struggle spawns renewal and a new, more equitable and just way of life for all people and species.

The Big Empty

This is a world in which the region sees an expansion of ethanol and biofuel production, which provide short-term growth for rural communities. But advances in technology lead to improved efficiency and increasing economies of scale. As the ethanol facilities grow larger, fewer and fewer employees are needed to operate them. Family farms disappear and rural economies falter as corporate farming and mega ethanol plants take over. A third of the region’s population dies and is not replaced. Lack of proper services and loss of rural communities lead to a region empty of people and hope.

I’d better stop there. I’ll have some more reports to report on in a couple of weeks.

As explained by this Associated Press article in the International Herald Tribune, the heavily subsidized German hard coal industry still employs about 33,000 people in eight underground mines. The plan is to phase out hard-coal mining starting in 2009, and for miners to receive compensation if they are laid off prematurely.

Hard-coal mining “has no future” in Germany, declared Economy Minister Michael Glos. “A great, long era is coming to an end in a socially responsible way.”

For decades, the German government has propped up the industry, which at its peak employed 500,000 — unwilling to risk massive layoffs and reluctant to eliminate a domestic source of energy. But after spending more than $200 billion in subsidies since the 1960s, it has finally decided that the subsidies have become unaffordable.

The phase-out is expected to cost nearly €30 billion (US$41 billion), with €21.6 billion (US$30 billion) of that financed by federal and Land (state) governments. Current subsidies are running at around €3.3 billion a year, or €100,000 per miner.

Proceeds from the initial public offering of the energy conglomerate RAG’s profitable chemicals, electric-power generation, and real-estate operations, which are expected to be in the neighborhood of €5 billion, will go to phasing out coal operations … and mitigating the continuing environmental costs that are and will continue to be the legacy of coal mining in the region.

However, there is a catch:

The bill, which is based on an agreement reached in February by the government, unions and RAG [the owner of the coal mines], includes a clause providing for the phase-out plan to be re-examined by parliament in 2012 in the light of market conditions. Wednesday’s Cabinet decision still requires parliamentary approval.

Back in the 1980s, the Kiel Institute had showed that the subsidies were so high per worker that it would have been cheaper to pension off all the coal miners than to keep subsidizing coal production. At the least, the government could have disallowed new recruiting (which only delays adjustment to the future), and let the industry contract through attrition.

Nonetheless, I suppose we should regard this latest decision as progress … and hope that the German Parliament does not change its mind in 2012.

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P.S. The title is not in good German, I realize. I think it should have been “In Deutschland wird Kohle beendet.” But I reckoned more people would understand “ist kaputt.”