Ethanol Starvation: Biodiesel Inflation

Starvation by Biofuels

Ah, the absolute certainty of the Law of Unintended Consequences.

In a nutshell: Food prices are rising because – surprise! – the demand for corn, soy and sugarcane/beets to make ethanol and biodiesel is driving up the cost of these basic food commodities.

Quoting from The Wall Street Journal (my favorite newspaper):

http://online.wsj.com/article/SB117608539258763747.html?mod=world_news_whats_news

Soaring prices for farm goods, driven in part by demand for crop-based fuels, are pushing up the price of food world-wide and unleashing a new source of inflationary pressure.

The rise in food prices is already causing distress among consumers in some parts of the world -- especially relatively poor nations like India and China. If the trend gathers momentum, it could contribute to slower global growth by forcing consumers to spend less on other items or spurring central banks to fight inflation by raising interest rates.

…And, on the more human side:

In one bustling open-air market in downtown Shanghai, shoppers say they are paying as much as two times the price they paid last year for green vegetables, and the cost of meat and vegetable oils have also soared.

So, people will spend less on everything else – big negative impact on the world economy. And those on the bottom of the economic totem pole will eat less, maybe starve.

BUT, HEY… “NO PROBLEMO,”…said a “conservative” acquaintance. He said he hadn’t noticed any increases in his grocery bills. There is a little myopia in his response, but I’m afraid lots of us might respond that way.

As I’ve been grumping about, ethanol ain’t all that it’s cracked up to be as an alternative fuel [See “Ethanol, Schmethanol” in the June, 2006 archives of this blog.].

Now this.

Heck, I’m back in the pro-atomic energy camp. But that’s another blog.

Comments

- John - said…
I agree about your comments with ethanol from corn and food products. Have you, however, checked out the possibilities from the jatropha plant? It doesn't compete with land used for food, because it grows where food products will not, giving it much more potential.

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