Steve G.

Destroying the Environment for “Renewable” Fuels

In Corruption, Economics, Environment, Global Warming on March 31, 2007 at 12:26 pm

It’s a good time to be a corn lobbyist. The largest acreage of corn since 1944 is to be planted this year, with a record harvest predicted if weather is even slightly cooperative. Here’s what the Washington Post tells you:

Corn prices have doubled since last fall due to explosive growth of the ethanol industry, driving up costs for cattle, dairy, hog and poultry producers.

“Explosive growth of the ethanol industry” translates to higher ethanol content in gasoline, thanks to government, high tariffs on Brazilian sugarcane ethanol, thanks to government, and massive subsidies for ethanol production, thanks to government. This government support for corn ethanol isn’t around because your representatives just care so much about CO2 emissions. In fact, corn ethanol does very little for net CO2 emissions. But it’s awesome for Midwestern special interests. Sugarcane ethanol is far easier to produce, and thus far more environmentally friendly, but since there’s nowhere in the US that is suitable for growing sugarcane (except, with huge government subsidies, the Everglades – government helping out the environment again), it must be imported from countries like Brazil. This might be a good idea, but the corn lobby and their pet politicians won’t hear of it, so ridiculous tariffs on ethanol have been imposed.

The larger acreage of corn being planted means that corn is being grown on land less well-suited for corn farming, which means that farmers will use more chemicals on their land to get a yield. These chemicals don’t all stay on their land, however. Some will end up in runoff, which means they’ll get into streams and rivers. There, pesticides and herbicides kill things, and fertilizers cause runaway growth of algae. When the algae dies, its decomposition uses up all the oxygen in the water. Then all the animals not killed by pesticides and herbicides die. Bam, dead stream/river/lake. As government continues to tweak the market, encouraging naturally uneconomical uses of land, the environment will continue to suffer – all in the name, supposedly, of renewable energy.

  1. THANK YOU for pointing this sort of thing out. Nebraska’s ecology is going down the shitter and it’s all because of these fucking subsidies.

    It makes no sense to grow corn in most of the Cornhusker State, ironically enough. It’s too dry here. To get the water for it, we need to suck the Ogallala Aquifer dry… and when that’s gone, well, you get shit happening like what’s going on in a lot of the rural counties, where everyone’s packing up and leaving because they extracted the last bit of water.

    We need to do away with the subsidies, the tariffs. Let the land be used more profitably, and more sustainably. A sustainable economy is a sustainable ecology.

  2. Hey, strangers.

    If the granola-chewers allowed it, this would be a great industry for GMO corn. The GMO kernels grown a few years ago that made all the headlines and resulted in many buy-backs had been modified primarily to be pest-resistant so no, or at least fewer, herbicides, insecticides and rodenticides would be “required” for its growth.
    Corn grown to be used as fuel could easily escape the GMO restrictions that govern “for consumption” crops and thus the large tracts of land needed could grow more corn with much less, if any, chemical runoff.
    But FedGov would likely view this as making too much sense and find a way to slam the door.

  3. If they can develop a drier version, then sure. Otherwise it’ll still suck the aquifer dry.

    BTW, nice to see you again Artus. Care to hop into the wonderful world of blogging again? I’m trying to get the old HoT crew on here.

  4. Yes, ethanol is a giant protectionist, corporate-welfare scam.

    I don’t like these pols who say “we” need to invest in alternatives. Yes, “we,” as in indivdual shareholders. Not “we” as in taxpayers. They will never learn.

    I would, however, be in favor of a compensatory tax laid on gasoline. After removing subsidies, a tax to account for the freely provided liability protection from the environmental and human damage that emissions cause seems fair. In fact, otherwise, we are subsudizing SUV drivers (such as myself) who don’t pay the true price of gasoline at the pump. The true cost is more than the direct financial subsidies, but also this liability protection.

  5. I agree with Al Gore on the concept of a revenue-neutral switch from a payroll tax to a carbon tax.

  6. I agree. I don’t like “sin” taxes. I don’t want you to pay tax on whiskey, because you drinking whiskey is none of my business. But emissions are my business. We should all pay for the damages we cause. So long as I do the damage to my own property, that’s my own business. But if I damage the body and/or persons of others, then I need to be accountable for that.

    I think that taxes should not only be low, they should also be simple and few. That’s why I’m generally not supportive of any “new” tax or any tax on things. I don’t like sales or excise taxes at all. But I think a carbon tax is different. And it should be offset by a tax credit, or even a flat-out check (same thing as a tax credit if it works like EIC). I don’t think that’s a “big government” initiative, it is a property rights one.

  7. The point of a carbon tax is that it’s used to either reduce or offset the emissions produced by the use of the carbon purchased …

    … but why should that have to be done through a tax? There are other ways of doing it that let the market take care of it.

    Instead of telling gas stations “you are going to collect a tax of x cents per gallon of gasoline sold, and then turn it over to the government for use in reducing/offsetting emissions,” why not just tell them “you’re responsible for reducing or offsetting the emissions of the gasoline you sell?” Then they can decide the best/most efficient/cheapest way to do that.

    Maybe it would involve buying and selling cleaner-burning fuels as part of it, maybe another part would be contracting with a carbon sequestration company for offsetting, or whatever, but it would be a diversity of solutions instead of an imposed one-size-fits all, and it would be the market rather than the bureaucracy determining what those solutions are.

    There are a lot of possible answers to every problem. A new tax is usually always the worst of those solutions.

  8. Well, carbon sequestration does bugger-all for raising revenue for the government, and a carbon tax is preferable to a payroll tax. With a tax credit for the poor, it’s even less regressive. And it’s easier to collect… you could collect it at refineries instead of gas stations. Twenty or so “clients” to deal with instead of 300 million.

    It raises revenue, helps the poor, simplifies taxation, and helps the environment all in one fell swoop… demanding less carbon emissions from gas stations or whoever would only help the environment. A carbon tax is clearly the way to go as a concrete step in the right direction.

  9. The vast majority of carbon emissions do NOT — I repeat, do NOT — come from gasoline sources.

    Every single manufacturer, every single industrial site, every single power company — including nuclear power — would be responsible for making such payments, as would the nation’s landfills… the list goes on.

    Sure, it’d still only be “10’s of thousands” rather than the perhaps 300 million individuals… but I guarantee you that the costs for such, minus any alteration in the economy, would be conveyed directly to those 300 million individuals.

    Not to mention the compulsory aspects in terms of libertarian ideology; it is far, far simpler simply to reduce the “need” for government revenue altogether and allow private corporations to create solutions.

    Furthermore, carbon taxes ignore the fact that even under the greenhouse gas models, carbon-dioxide is nowhere NEAR the ‘worst offender’. (Water vapor is.) Methane is also vastly more effective on an equal-parts-per-million basis compared to CO2. Yet no one seems overly concerned about the landfills pumping methane into the atmosphere; in fact, “Green” organizations routinely protest any attempt to burn that methane for power production. (Simply burning it is okay. But god forbid you turn a profit.) I have witnessed this first hand.

    Back to the idea of private organizations creating solutions; much like the owner of Virgin’s carbon sequestration project. Something much like Waste Management’s myriad programs. Something much like Toyota’s Prius and Yaris; the same Prius that Toyota didn’t bother advertising for because they were continuously backordered for 6+ months compared to their production capacity — this in a time when the automotive industry was tanking hardcore.

    The argument, “We need government to do something”, or even “I can support carbon taxes because the government is providing liability for emissions” is still supporting *government action* on what is fundamentally a problem that we CANNOT AFFORD TO LEAVE TO BUREAUCRATS.

    🙂

  10. I despise what corn is doing to our country. It is in every cheap shitty softdrink that 90% of Americans consume, HFCS (High Fructose Corn Syrup) which has no value other than making the population fat. The government places high tariffs on sugar so the companies use HFCS to make more profit.

    In places like Japan they use Stevia – (notice how they are not so damn fat over there!) But because the corn industry lobbiests has everyone by the balls Stevia is deemed not fit for consumption in the US. — Sheer Insanity!!!

    I think a corn/corn product boycott is a wonderful idea. However, it would prove to be rather difficult.

    I encourage folks to drink purified water, avoid anything with HFCS, always go with real sugar if you must. And, learn to consume food/drinks without sugar if you can. It makes for a healthier, smarter person.

  11. Stuart,

    You write:

    “A carbon tax is clearly the way to go as a concrete step in the right direction.”

    Then I guess we’ll have to agree to disagree. IMO, a new tax is never a step in the right direction.

  12. I want the government in charge of using the revenue generated to “offset” the carbon damage. I want people to simply pay a price for the damage they cause. It’s only fair. The conservationism alone that it would inspire would do enough “offsetting.” It would make gas more expensive and thus encourage investments in alternatives. JUST SAY “NO” TO GOVERNMENT OFFSETS. The government is far too stupid to “offset” emissions.

    Knapp – It isn’t a tax. It’s the removal of a corporate welfare scam.

    Thomas Knapp: “Eliminating corporate welfare is never a step in the right direction!”

  13. Or we could have no tax on either income OR carbon, and that would rule.

    Look, government intervention is always a net negative for the environment.

  14. Yeah. And I should be able to spew toxic fumes into the air and make everyone else pay for it, becasue that’s why libertarianism is all about!

  15. My bad. Another typo. When I said “I want the government in charge of using the revenue generated to ‘offset’ the carbon damage,” I MEANT to say “I DON’T want the government in charge of…”

  16. “Yeah. And I should be able to spew toxic fumes into the air and make everyone else pay for it, becasue that’s why libertarianism is all about!”

    No, if you negatively affect others with those fumes, they can demand restitution from you. That’s what libertarianism’s about.

  17. 1) Under the current law, they can’t. My wife’s grandfather died from a type of cancer widely believed to have been caused by exposure to MBTE, a fuel additive that was only recently removed from gasoline (last year). He could not sue. The oil companies have liability protection.

    2) I think the liability protection is a good thing. In its absence, the courts would be filled with cases of people who truthfully (and not truthfully) had been injured by oil companies. It would clog up the justice system and make it very difficult for oil companies to do business.

    Sometimes have to be standardized for efficiency. But they should be made to PAY for the liability protection. And they should not receive the subsidies that they do.

    Should we all just form a class action group and sue the oil companies? Or should we sue individuals? It isn’t realisitc. It isn’t plausible.

  18. If the granola-chewers allowed it, this would be a great industry for GMO corn. The GMO kernels grown a few years ago that made all the headlines and resulted in many buy-backs had been modified primarily to be pest-resistant so no, or at least fewer, herbicides, insecticides and rodenticides would be “required” for its growth.
    Corn grown to be used as fuel could easily escape the GMO restrictions that govern “for consumption” crops and thus the large tracts of land needed could grow more corn with much less, if any, chemical runoff.
    But FedGov would likely view this as making too much sense and find a way to slam the door.

    Problem w/ gmo corn is that it cross-pollinates other corn, including those who don’t want GMO genes in their for-consumption corn. To addd insult to injury, Monsanto and crew then charge loyalties rather thaan paying damages.

  19. unrepentant_archcapitalist:

    I want people to pay for the damage they do as well — most definitely including the corporate welfare queens in the petroleum industry. I just think that there are better ways to do it than with a carbon tax. In a later comment you try to shoot down the idea of tort litigation, but your objection comes down to you wanting to do things by ukase rather than through the market, and for damage to be stipulated to rather than proven.

  20. Tom – I’m normally all for litigation and I’m 100% “tort reform.” But when it comes to gas, it just isn’t practical. The fact is that burning fossil fuels damages people’s health, and some people are going to be more sick than others. How can this be resolved through litigation? We’re probably all less healthy due to pollutants? Do we all file small suits? Do we form a class action group? Do we just let it go? I think these unique cases are good cases for government intervention and standardization, but right now, the petroleum welfare queens are getting the liability protection without paying the price. I say make them pay! And give us all a tax cut to make up for it.

  21. unrepentant_archcapitalist:

    We seem to be on the same side on ends here, just at odds over means. That’s not surprising, since the issues are complex.

    I’ll give you this: Taxing a thing is a way to get less of that thing.

    On the other hand, giving money to government for a given purpose, which I’ll call X just because blog comments should be full of variables and acronyms and stuff, is a good way to NOT accomplish X.

    On the third hand, I oppose corporate “liability protection” on principle. I don’t want them to pay for it because I don’t want them to have it.

  22. They do have it for free. Why not make them pay for it?

    Yes, WE will end up paying for it. Just as WE would pay for it if they didn’t have it. What is the least costly, overall? That is the question.

    The purpose is not to encourage conservation, but that would be an effect, yes. The purpose is to stop giving an unfair advantage to gasoline over other fuels. By not making oil companies pay for this liability protection, the government is effectively subsidizing them and giving them an unfair advantage.

    I don’t want to give money to the government for them to do X with it. No offsets or any other crap like that. I’m saying this:

    1) Repeal all direct subsidies to Big Oil

    2) Determine the economic benefit of the liability protection and assess a charge to the oil companies to reflect that benefit

    3)Reduce Americans’ income tax/FICA by an amount equal to the charges levied against the oil companies

    How is this a bad idea?

  23. 100% against “tort reform” I should have said.

  24. There’s an excellent book out on the matter of corn renewability: The Omnivore’s Dilemma, by Michael Pollan. It is a good read and gives some excellent reasons why corn needs to be abanoned as a fuel crop.

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