I’ve been looking at energy and environmental policy for many years and I’m usually happily surprised when things take a smart turn. Even thoughtful, progressive policymakers like Barack Obama, though, wind up making bone-headed calls. Obama offers nuclear plant loan guarantee, as the FT reports, is one good example.
I’m, to put it politely, less-than-sanguine about nuclear power and have been for forty years. But I’m not going there now. It’s a beautiful sunny day with snow on the ground in the Big Apple, and I’ve had a productive morning, and I want to look at something good.
Biofuels policy, in the EU and US, has been, as I heard Jeffrey Sachs once describe it, misguided. Likely so, but, at the end of the day, the power of the farm lobbies in Europe and America can, and often do, trump good policy. Nevertheless, folks actually concerned about poverty, energy use, the waste of public money on wasteful subsidies and other matters, have managed to make their voices heard.
The Europeans have been throttling back on the most misguided of their biofuels policies for a couple of years. As the “NY Times” notes here “European governments agreed in December 2008 that only biofuels that reduced greenhouse gas emissions by 35 percent compared with fossil fuels should qualify for meeting the trade bloc’s current goal.” The article reports, though, on further flies in the ointment for European biofuels, namely the fact that land-use changes that are effected to grow crops for biofuels greatly exacerbate their environmental impact. (See studies, for instance, referenced in my post Are Biofuels A Bummer?) New studies about to be published by the European Commission will add more fuel to the fire – pun intended – and may well necessitate even more circumspection on whether biofuel production really does what it’s intended to do: reduce GHGs.
Meanwhile, EPA has finalized new regulations for the National Renewable Fuel Standard Program. “For the first time, some renewable fuels must achieve greenhouse gas emission reductions – compared to the gasoline and diesel fuels they displace – in order to be counted towards compliance with volume standards.” That’s smarter, certainly, than making the problem worse. The NYT calls these new regs Sensible Rules for Ethanol in an editorial. “Despite pressure from farm state politicians, the Environmental Protection Agency has taken an important step to ensure that biofuels help rather than hurt the environment.”
There’s also the issue of biofuels putting enormous upward pressure on food prices, as well as pushing GHGs in the wrong direction. Paul Krugman had a characteristically penetrating column on this that I noted here. Krugman wrote “Where the effects of bad policy are clearest, however, is in the rise of demon ethanol and other biofuels. The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a ‘scam.'”
The miracle of this is that critical policymakers like EPA Administrator Lisa Jackson actually get it. What a concept.
