Ethanol and greenhouse gas emissions: be skeptical

In the realm of science, it pays to go into things with an open mind. In the realm of human thought, an open mind is a rare event. We’re hardwired to immediately trust anything we agree with and are skeptical of anything we don’t. Because of that, we can find ourselves becoming very hypocritical, criticizing something for a perceived flaw while defending something else for the exact same flaw. If we were to do evaluate scientific research in this manner, we would be, well, exactly where we are now in the realm of global warming.

That’s why I was a bit disappointed to see this article up on Watts Up With That. Now, I don’t mean to criticize the site or its founder; they do excellent work. But he’s clearly not well versed in the realm of biofuels. So first, a brief background on this paper (pdf)and the controversy it is involved in. Back in early 2008, the idea of considering indirect land use change (ILUC) to determine greenhouse gas emissions from ethanol production was first introduced. Let’s ignore the idea of whether we should care about GHGs in the first place. The theory behind ILUC is simple and intuitive; if we grow more corn for ethanol here, we can’t make as much food. So in order to meet that demand, we’ll have to grow it somewhere else. And that means cutting down the rainforest or something to that effect. Obviously, the science is more complicated, and relies a lot on agricultural economic models. But that’s not really needed for now. This paper is an update of this concept. It claims that an increase from 2001 ethanol production (~1.7 billion gallons) to expected 2015 levels (15 billion gallons) will not reduce worldwide GHG emissions due to the added emissions from, well, cutting down the rainforest and stuff.

My tribute to Norman Borlaug

Norman Borlaug, quite possibly the most important person you’ll never hear about in school, died today at the age of 95. Why was he important? I guess he didn’t do that much, if you consider saving the lives of a billion people nothing…

He did that by being the father of the Green Revolution. While some were saying that overpopulation was at hand, and mass starvation would result due to our silly idea of reproducing. Instead of declaring doom and gloom, Borlaug introduced new strains of wheat to Mexico, India, and Pakistan, and introduced modern farming practices. The results were immediate and astounding. Grain yields exploded, and these nations’ food security grew substantially. The fact that we’re able to fit over 6 billion people on this planet today is a direct result of his work. For his work, he has recieved a well deserved Nobel Peace Prize, as well as the Presidential Medal of Freedom and the Congressional Gold Medal. To say he’s the greatest person of the 20th century may not be an understatement.

Another dark side of Cash 4 Clunkers

So, Cash for Clunkers was made to stimulate the economy.  We’ve heard an awful lot about the problems it has had so far.  In brief:

– It’s undoubtedly hurting charities.
– It’s well behind schedule in payments.
– It’s part of the “broken window” fallacy. Basically, it assumes you can create wealth by destroying wealth.
– It’s highly likely it will drive up the prices of both used cars and used car parts, thereby hurting the lower and lower-middle classes.
Etc., etc.

I’d like to mention something most don’t. Basically, one of the big problems with the “broken windows” fallacy is that it ignores opportunity costs. Fortunately, with C4C, we know exactly what that opportunity cost is. The extra $2 billion that was poured into the program came at the expense of loan guarantees for new energy projects. Think about that for a second. Think about what the opportunity cost was.

What does this mean? It means it’ll be harder for new alternate energy projects to be funded. These are the sort of projects that are the first ones cut during a credit crunch like this recession. After all, they’re unproven technology, and therefore high risk. Personally, I know over a dozen biofuel companies who have dramatically slowed down their commercialization plans after the big crunch last year. These people would love loan guarantees in order to star putting cement on the ground and get their projects running.

At worst, these loan guarantees would be no less stimulating than C4C, as any company that fails is no different than blowing up cars. In fact, in the grand scheme of things, its better, as every failed company tells everyone else what not to do, and thus increases the odds for everyone else.

At best, these loan guarantees would be a real stimulus, helping to form stable, long term companies that generate wealth and provide dozens of direct jobs without government funding. And would also reduce CO2 emissions if you’re into that sort of thing, possibly reduce energy imports, prove that such projects are possible and create a boom of new projects (thereby stimulating the economy even further), and so on.

Given the loss of 2 billion dollars of loan guarantees here, I think it’s safe to say that C4C has failed in stimulating the economy.