The Global Poor Will Suffer the Worst Ethanol Hangover

The Global Poor Will Suffer the Worst Ethanol Hangover

The headlong rush in many parts of the world to replace oil with biofuels (ethanol and biodiesel) illustrates how the best of intentions can run afoul of the law of unintended consequences. While positive effects have been elusive -- and, in fact, are unlikely with current policies -- starvation and malnourishment are becoming worse among the poorest of the poor.

The European Union has announced that it wants to replace 10 percent of its oil consumption with biofuels by 2020. President George W. Bush announced last year a goal of replacing 15 percent of domestic gasoline use with biofuels over the next 10 years, which would require almost a five-fold increase in mandatory biofuel use to about 35 billion gallons. In June 2007, the U.S. Senate pushed the target to 36 billion gallons by 2022, of which 15 billion are mandated to come from corn and 21 billion from other more advanced but largely unproven sources. China is aiming for 15 percent conversion to biofuels.

The reality is that with current technology, almost all of this biofuel would have to come from corn because there is no other feasible, proven alternative. But because of the inefficiencies inherent in producing ethanol from corn and the relatively meager amount of energy yielded by burning ethanol, the demands on farmland would be staggering. An analysis by the Paris-based Organization for Economic Cooperation and Development suggested that replacing even 10 percent of America's motor fuel with biofuels would require that about a third of all the nation's cropland be devoted to oilseeds, cereals and sugar crops. Achieving the 15 percent goal would require the entire current U.S. corn crop, which represents a whopping 40 percent of the world's corn supply.

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