Is the U.S. ready for sane ethanol policy?

Imagine you’re a policy maker with the power to commit federal cash and rules to a strategy for reducing greenhouse gas emissions and fossil-fuel use.

You’d want to build in mechanisms to make sure your policies are working toward your goals and not having all sorts of negative unintended consequences … right? 

Well, that’s what a coalition of green NGOs — Environmental Working Group, Friends of the Earth, Network for New Energy Choices, the Clean Air Task Force, and New York Public Interest Research Group — are calling for with regard to the nation’s biofuel policy.

They charge that  the U.S. biofuel program actually "exacerbates global warming" because of greenhouse gas emissions from nitrogen fertilizers and the conversion of grasslands and rainforest to cropland. Further, the mass production of monocropped fuel feedstocks like corn, soy, and palm degrades soils, increases water pollution, drives out biodiversity, and endangers the food security of vulnerable populations. In the process of creating these lamentable side effects, biofuels are offsetting a relatively small amount of conventional fuel use — and are grabbing the lion’s share of federal support for alternative energy. In short, biofuels have been an abject failure.

Whether or not you agree with their analysis, it’s hard to see how any sane person could object to their policy proposals, which I’ve pasted below the fold. Their suggestions amount to safeguards to ensure that federal biofuel policies actually reduce greenhouse gas and don’t contribute to a food crisis.

Under the previous regime, such standards seemed too high. Few assumed that President Bush promoted biofuels because he thought they might reduce gas consumption (never much of a priority) or mitigate climate change (which he never took seriously).

After all, as Dennis Keeney, emeritus professor of agronomy at Iowa State, recently wrote, "money, not science, has driven ethanol fuel policy." Keeney’s assessment applies to U.S. biofuel policy since its inception under Jimmy Carter.

Will Obama do better? Last I checked, the only biofuel-related tweak the new administration was considering involved trying to get more etahnol into the fuel supply. But if the president does want to align biofuel policy with his environmental and social goals, he should heed the policy proposals cobbled together by the Environmental Working Group and its peers, pasted below.

1. Ensure that all policy incentives for renewable fuels, including mandates and subsidies, require attainment of minimum environmental performance standards for production and use, to ensure that publicly supported “renewable fuels” do not degrade our natural resources.  Such standards would: certify net life-cycle greenhouse gas emission reductions through 2050, taking into account direct and indirect land use change; and do not cause or contribute to increased damage to soil quality, air quality, water quality, habitat protection, and biodiversity loss.  Compliance with these standards must be verified regularly.

2. Restrict the RFS to fuel options that do not cause environmental harm, adverse human health impacts or economic disruption.
   • Cap the RFS at current levels and gradually phase out the mandate for biofuels, unless it is clearly demonstrated that such fuels can meet minimum environment, health, and consumer protection standards.
   • Establish feedstock- and technology-neutral fuel and environmental performance standards for all biofuels and let the market devise ways of reaching them. 
   • Periodically reevaluate the sustainability and performance of renewable fuels.
   • Provide a mechanism and requirement to mitigate unintended adverse effects, including authority to adjust any mandate downward.

3. Tie the biofuels tax credits to the performance standards
   • Phase out the biofuels tax credit to blenders while phasing in tax credits or subsidies for renewable fuels that are scaled in accordance to the fuels’ relative environmental, health, and consumer protection merits.

4. Rebalance the U.S. renewable energy and energy conservation portfolio to reflect the relative contribution these options can make to reducing fossil fuel use, enhancing the environment, spurring economic development, and increasing energy security.
   
   • Subsidies to renewable energy and conservation should be distributed more evenly between alternative energy sources, and should be allocated in a manner that is fuel – and feedstock -neutral; biofuels, particularly corn ethanol, must no longer receive the lion’s share of federal renewable energy subsidies.
   • New policy must:
     • Emphasize energy conservation; we cannot drill or grow our way out of the energy crisis.
     • Create a level playing field among renewable energy options; set fuel-, feedstock- and technology-neutral standards, so as to reduce fossil fuel consumption and greenhouse gas emissions, improve environmental quality and biodiversity, and reduce pressure on agricultural markets

5. Support research to improve the analysis of net climate impacts, net non-climate environmental impacts, commodity price impacts, and other social factors that are substantially affected by policies that promote biofuels. All of the previous policy asks must be based on better research on the impacts from biofuels; understanding these impacts are crucial to developing sound policies.