What Green Government Does When It Picks Winners

by Will Wilkinson on April 2, 2009

Mother Jones on heavily subsidized biofuels:

Food prices have risen 130% since 2002. The World Bank estimates that up to 75% of the increase is due to demand for biofuels.

Clearing grasslands to plant biofuel crops releases 93 times as much greenhouse gas as will be saved by the fuels grown on the land each year. Destroying Indonesian peat bogs releases 420 times as much.

There were food riots in at least 30 countries in the past 2 years. More than 40 people were killed when Cameroonians protested rising prices.

The US government spent $9.2 billion on ethanol subsidies in 2008. It spent $1.5 billion on food aid.

But now we’ve got better people and won’t destroy the environment and cause food riots this time! Right?

uknowbetter

When even Mother Jones call liberals retards, it's pretty obvious that liberals are retards.

MattC

Will,

I don't know if you ever have researched this or written on it, but I would love to get your take on the obesity-poverty demographics correlation in the US, it's (theoretical) relation to food prices, and specifically it's relation to cheap food.

Paul_G_Brown

Interesting to compare and contrast this post -- where the idealogues (read: politicians) -- did something -- biofuels -- that the technocrats (science types, policy wonks) -- thought was pretty stupid.

In their defense, it isn't clear to me that what you have here is a case of picking a winner. The overall response has been more portfolio based. Tax credits for household solar, quota requirements on power generators that are leading (here in California, anyway) to investments in geothermal and wind. A commendable emphasis on energy savings. At a federal level we're gonna have a cap-n-trade (not ideal, but if you auction the licenses, and allow 'em to be resold, and enforce the thing well, then you have a psuedo-carbon tax).

Biofuels are dumb. But in the great sausage factory that is the political process, I'll trade my votes for ethanol from corn (although I think it's dumb) for your votes on cap-n-trade, and what-not.

Cameron

75% seems like a wild over estimate, I've seen more like 15-20% elsewhere, in any case the idea of cap and trade is that the market picks winners...the government builds infrastructure that can accommodate whatever winner is spat out...