Apr 28, 2010

biofuel effect on the international oil market

Sorry Berkeley... nice paper misses the point that the small decrease in cartel controlled market pricing hardly justifies or offsets the food or commodity price increases of biofuels or the massive toll it takes on freshwater and forest resources?

University of California-Berkeley, derives a method to quantify the impact of biofuel on fuel markets, assuming that these markets are dominated by cartel of oil-rich countries, and that prices in these countries are set to maximize the sum of domestic consumer and producer surplus, leading to a wedge between domestic and international fuel prices..., we show that the introduction of biofuels reduces global fossil fuel consumption and international fuel prices by about 1% and 2%, respectively.  Full Paper

In short, we see not the production of a "green" fuel but rather an ecological calamity in service of the idea of green fuel: a highly profitable travesty masquerading as a "solution."