May 31, 2009

What can justify a policy that deliberately increases the price of food and fuel?

This is where the EPA's analysis is especially interesting. Given the results published in Science, many biofuels might not meet the greenhouse gas reduction required by EISA. This would largely gut the biofuel mandate. 
 
Calling passage of the bill the "shot heard 'round the world," House Speaker Nancy Pelosi said it would improve the "health of our children." ... this is questionable at best.
 
While the Environmental Protection Agency (EPA) analysis suggests that the switch toward renewables will decrease ammonia, carbon monoxide, and benzene, it also predicts "significant increases in ethanol and acetaldehyde emissions" and "more modest increases in nitrogen oxides, formaldehyde, particulate matter, hydrocarbons, acrolein, and sulfur dioxide." Citing time constraints, the EPA did not do a full analysis of the net health effects of these emission profiles, but a reasonable assumption is that the detrimental health impacts from increased particulate matter will at least offset the health improvements from the predicted reductions in the other pollutants.
 
The EPA's analysis suggests that the switch toward renewables will significantly increase various emissions.
Supporters of the Energy Independence and Security Act of 2007 (EISA) also claimed that it will reduce greenhouse gases. Both Speaker Pelosi and then-President Bush said the bill will help reverse global warming.
 
Indeed, much of the early enthusiasm for biofuels was based on the belief that their use would reduce greenhouse gases. It is true that burning biofuels results in less tailpipe emissions of greenhouse gases relative to burning petroleum. Yet this ignores the increase in emissions that results from the production of biofuels, especially the land use changes as farmers convert forest and grassland into cropland for biofuel production. An article published in Sciencemagazinein 2008 found that "corn-based ethanol nearly doubles greenhouse gas emissions over 30 years and increases greenhouse gases for 167 years." Another article in Scienceconcluded that crop-based biofuels create a "biofuel carbon debt of 17 to 420 times more carbon dioxide than the greenhouse gas reductions that these biofuels would provide by displacing fossil fuels."
 
The EPA's findings indeed show a substantial increase in greenhouse gas emissions stemming from the initial land use changes needed to meet the mandate. Only over a long time horizon do the relatively clean-burning fuels start to accrue reductions in greenhouse gases relative to petroleum.

Gayer

 

The following figure from the EPA's analysis shows the estimated emission profiles for corn-based biofuel, soy-based biodiesel, sugarcane ethanol, and switchgrass ethanol, stemming from the 2022 mandate of 36.0 billion gallons. There is an extremely large spike in emissions due to initial land-use changes, especially for corn-based ethanol and soy-based biodiesel. It takes more than 30 years for the emission reductions from these cleaner burning fuels to make up for the spike in emissions from the land-use changes. (Sugarcane and switchgrass biofuels fare much better.)

Opting not to substantially gut EISA's biofuel mandate, the EPA evaluates these time profiles using either a very long time horizon of 100 years (so that there are more years in the future garnering emission reductions in order to dominate the first-year emissions spike), or a shorter time horizon (30 years) but with a zero discount rate (eliminating the typically assumed preference for current benefits relative to future benefits).
 
This figure clearly calls into question the merits of the renewable fuel standard. At a cost of higher fuel prices (the EPA predicts 2.7 to 10.9 cents more per gallon), higher food prices (the EPA predicts $10 more per person per year on food), increases in harmful local pollutants, and a considerable increase in short-term greenhouse gas emissions, the standard only starts paying climate-related dividends many years in the future.