The new imperative

April 28, 2008
Energy policy for many years has been impossible to discuss outside an environmental context.

Energy policy for many years has been impossible to discuss outside an environmental context. Within limits, the linkage makes sense. Energy production, transport, and use have environmental consequences that must be acknowledged and controlled. Distortion arises, however, when policy-making consistently favors environmentalism over energy supply and affordability. Longstanding distortion of this type now draws a new imperative into the energy-environmental policy nexus: food.

Alarm is spreading fast over a rapid increase in food prices. World Bank Pres. Robert B. Zoellick recently said food prices have doubled during the past 3 years in a crisis that threatens to push 100 million residents of poor countries deeper into poverty. The United Nations World Food Program (WFP) says its studies confirm the estimate.

“There is the new face of hunger—the millions of people who were not in the urgent hunger category 6 months ago but now are,” WFP Executive Director Josette Sheeran said in London last week. The WFP, calling high food prices the biggest challenge of its 45-year history, wants new support from governments distracted by threats of recession.

Energy and food

Energy intersects the food-price crisis in several places, of course. Record prices of oil, gas, and other energy forms lift agricultural and transport costs. Prices of all commodities have been levitated by an influx of investment money seeking shelter from the dollar’s weakness and the risks of other assets. And population growth provides a structural reason for consumption of food, like that of energy, to increase.

Then, of course, there are biofuels.

Promoters of fuel ethanol from grain and of diesel esters from oil seeds and other agricultural products insist that energy costs explain most of the food-price jump. Land-use changes show those claims to be self-serving nonsense. Farmers naturally dedicate acreage to crops that markets value most. In the US, that means corn, demand and prices for which are soaring because of mandates for heavily subsidized fuel ethanol. Farmers consequently are growing less wheat, soybeans, and other food crops, so those prices are soaring, too. Analogous patterns are evident elsewhere as governments push biofuels—supposedly to fight pollution, lower emissions of greenhouse gases, and extend oil supply but mostly to enrich farmers.

A World Bank study published this month refutes the energy-cost excuse for rising food prices as well as explanations based on crop failures. Only about 15% of the increase in food product prices is attributable directly to elevated energy and fertilizer costs, the study said. And supply slumps from poor crops in some areas have been offset by good crops and increased exports elsewhere.

Although the World Bank and UN continue to tip-toe around the obvious, the verdict is clear: The biofuels craze, while raising costs for everyone, is devastating the chronically hungry. And it will continue to do so until crop markets adjust. According to the World Bank study, the adjustment won’t play out before 2015.

On the role of biofuels in the food crisis, World Bank and UN officials tread carefully. Both organizations advocate aggressive responses to global warming, inevitably including governmental support for biofuels. Neither organization has time for doubts about the extent to which humanity actually affects Earth’s heat balance or for questions about biofuels’ environmental performance. Neither organization pays much attention to assertions that a build-up of carbon dioxide in the atmosphere has a benefit much more definite than the heating for which it may well be receiving disproportionate blame: It promotes plant growth and thus can help fight hunger.

Right to food

Within the UN works a group called Special Rapporteur on the Right to Food, which asserts, “The right to food means that governments must not take actions that result in increasing levels of hunger, food insecurity, and malnutrition.” In service to environmental alarmism and agricultural politics, governments are doing precisely that at the further expense of affordable energy supply.

Last year the group called for a 5-year moratorium on biofuels. It would be a reasonable and moral first step toward correction of worldwide policy errors fast proving to contradict basic human needs.