Tuesday, May 26, 2009

Dumb, Dumber, Dumbest

For those Americans who think biofuels is a good idea:
Forcing the market to produce large amounts of renewable fuel will harm consumers in two ways: it will increase prices at the pump, because biofuels are more costly than gasoline, and it will drive up the price of food, because it diverts crops into fuel. The impact of food price inflation will weigh most heavily in developing countries where food purchases comprise larger shares of consumption. Food expenditures account for as much as 70 percent of household consumption among lower income groups in the developing world.
Right now, Congress is considering the Waxman-Markey bill, which would establish an economy-wide cap on greenhouse gases. With a firm cap in place, a law that mandates different fuel mixes will increase the cap’s compliance costs and will not achieve any further reductions. Indeed, to the extent that land use changes are not captured by the cap, the biofuels mandate may actually lead to emission increases. Unfortunately, not only does the Waxman-Markey bill keep the biofuels mandate in place; it goes one step further by creating a renewable electricity standard that mandates different fuel types for electricity generation.
That's Ted Gayer writing at The American.

And then you have the fuel economy standards just agreed to. Heaven forbid we should do something sensible like introduce a carbon tax. Or, at least, cap-and-trade.


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