Food for Fuel?

MYTH VERSUS REALITY

Tom Daschle

The article "How Biofuels Could Starve the Poor," by C. Ford Runge and Benjamin Senauer (May/June 2007), recycles the "food versus fuel" mythology that has been rebutted time and again. Despite the authors' allegations, the facts are clear: U.S. corn is used to feed mostly animals, not people; converting the starch from a portion of the U.S. corn crop into biofuels is an efficient way to reduce the United States' dangerous dependence on imported oil; and the recent firming of grain prices in the United States -- and therefore the world -- will help, not hurt, farmers in food-deficit nations. Most important, current production facilities for grain-based biofuels are a critical platform for launching the next generation of advanced cellulosic and waste-derived biofuel technologies.

To their credit, Runge and Senauer recognize that ending the United States' suicidal dependence on fossil fuels will require a comprehensive energy policy. They are absolutely right: any solution to the world's twin energy and climate crises will need to be broad and multifaceted. Existing energy sources must be used more efficiently through increased fuel-efficiency requirements, better building codes and appliance standards, and market-driven demand-side management programs, such as ones that give utility companies profit incentives to increase energy efficiency and conservation. The playing field for renewable sources of energy -- such as wind, solar, and geothermal energy -- must be leveled with tax incentives that reduce the production costs for renewable-energy technologies. And the increasingly perilous costs of climate change (which is caused by the unbridled use of fossil fuels) must be stemmed with a binding international regulatory framework for greenhouse gases that includes the United States and China, the world's largest emitters of such gases today.

Unfortunately, Runge and Senauer distort the central role that biofuels will play in any such comprehensive solution, both in the United States and abroad. Far from starving the world's poor, as they claim, biofuels can help the world meet its energy needs without jeopardizing food security.

The current generation of biofuels has significant environmental benefits. The U.S. federal policy that requires minimum levels of oxygenates in U.S. gasoline has improved air quality in the United States while increasing the use of biofuels -- two of the primary benefits that Senator Bob Dole and I sought when we successfully pushed for that policy in 1991. The current generation of biofuels also helps reduce the emission of greenhouse gases. An interesting analysis released by the Natural Resources Defense Council last May showed that corn-based ethanol outperforms gasoline when the two fuels' full production and use cycles are compared. Innovation in the biofuel industry is leading to even greater greenhouse gas reductions, regardless of the feedstock.

Runge and Senauer themselves argue that the next generation of biofuels will dramatically lessen greenhouse gases. But not content to highlight these benefits, the authors stack the deck by focusing on the costs of developing these fuels. The problem is that their cost predictions take no account of the effects of innovation or of policy proposals that appear likely to be implemented over the next several years (and which they support).

One such proposal is for a U.S.-wide carbon cap-and-trade system, which would immediately provide an economic advantage to fuels with lower carbon content. Although such a system is unlikely to come into being under the current president, most analysts believe that it will by 2012. Another significant proposal is for new state and federal incentives for low-carbon fuels, such as the program now being implemented in California, which is set to take full effect by November 2008. By mandating that a growing percentage of the market for transportation fuel be set aside for low-carbon fuels, such programs would unleash a tidal wave of private-sector investment and technological innovation that would ultimately bring about something of a low-carbon-fuel Manhattan Project. In stark contrast to the head-in-the-sand policies of the Bush administration, the example of these policies could serve as a beacon to the rest of the world and encourage similar behavior elsewhere, including in China and India.

Under either of these policies, both the costs associated with carbon-intensive fossil fuels and the incentives for innovation in low-carbon fuels would dramatically increase. Thus, it is reasonable to expect cellulose-based ethanol to be competitive far sooner than in ten years, the time frame predicted by Runge and Senauer.