Sen. Dick Lugar (R-Ind.) stopped by ($ub. req'd) the American Enterprise Institute yesterday to give a speech arguing that Congress should lift the 54-cents-a-gallon tariff on imported ethanol.
"To demonstrate leadership the United States should lift its tariff on Brazilian ethanol that now shelters the U.S. industry," Lugar told the AEI crowd. Many politicians -- including Lugar, who's from a big corn state -- have supported the tariff to protect American biofuels from Brazil's cheaper sugarcane ethanol. But now there's a growing movement calling for elimination of the tariff to bring down fuel costs and lower demand for corn.
Sens. Dianne Feinstein (D-Calif.) and Judd Gregg (R-N.H.) introduced legislation in June to lower the tariff to 45 cents a gallon. Their bill would prohibit the tariff on imported ethanol from being higher than the subsidy to produce ethanol domestically. A few weeks ago, GOP presidential candidate John McCain also advocated dropping the tariff.
Brazilian ethanol company UNICA is hoping to seize on what seems to be shifting opinion in Congress. They're running radio and TV ads in California, Florida, and Washington, D.C., over the holiday weekend, aiming to spur consumer outrage over the tariff.
Denmark’s Hedegaard urges G8 to push ahead on climate talks
China blasts U.S. climate bill enabling penalties on trade partners
Comments View as Flat
Wolverine Posted 6:08 am
03 Jul 2008
End Tarrifs By Prohibiting Imports
The environmental ideal on which to base our thinking on issues like this should be the following: Everything should be produced, bought, and sold locally. If it can't be made locally, it's either not necessary or you're living where humans don't belong.
Specifically, an elimination of this tariff would cause even more destruction of the Amazon rainforest, as Brazilian farmers are being pushed there by growers of sugarcane used for ethanol. Of course people like Lugar and Feinstein don't care about the natural environment, despite the latter's pandering to the contrary, so this awful idea might just pass.
Permalink
Ron Steenblik Posted 8:22 am
03 Jul 2008
Wolverine
You can experience autarky easily: go live in North Korea. Enjoy. And drop us a postcard from time to time.
As for Brazilian farmers being pushed into the Amazon by growers of sugarcane used for ethanol, that contention is debatable. There is equally strong, or stronger evidence that the 16% decline in area planted to soybeans (and 19% reduction in the amount harvested) in the United States last year, thanks to a big expansion in area planted to corn for ethanol, led to a boom in soybean production in Latin America, including the Amazon.
In other words: federal mandates support ethanol use; tariffs reduce the portion of the ethanol that comes from more-efficient sources, like cane grown in Brazil; more corn is planted in the United States at the expense of soybeans; other countries, including Brazil, make up for some of that shortfall by increasing their own production.
First-best solution? Eliminate the mandates and tax credits for biofuels AND eliminate the secondary ($0.54/gallon) tariff on ethanol. Second-best solution? Eliminate the secondary ($0.54/gallon) tariff on ethanol. Nth-best solution? Maintain the mandates and tax credits for biofuels and ban any imports of ethanol.
These are only my personal opinions.
Permalink
David Roberts Posted 8:40 am
03 Jul 2008
N+1th best solution
Turn the U.S. into North Korea.
grist.org
Permalink
Sam Wells Posted 1:43 pm
03 Jul 2008
Brazil is hot!
Not only does Brazil tout its vast ethanol capacity but they're found a massive crude oil formation off the coast. Things Brazil are very attractive now, and a bunch of investment capital is flowing that way. We can debate whether or not the US opens more offshore oil production, but the fact is we're sending oil rigs to Brazil FROM THE GULF faster than ever. For some reason it is a true magnet.
North Korea jokes aside, I tend to have a wild streak that says all these US tariffs and subsidies simply have to go - all of them. Get rid of the [corn] ethanol production subsidy entirely. If you want to subsidize something, subsidize fixing the infrastructure like rail and better electrical transmission lines to improve mobility and brink online more clean power like wind and solar. Investing in energy itself if throwing away money - one needs the infrastructure first so new things can be done.
And for you folks who only want to "act local" just consider that Japan, which imports almost everything, is one of the most energy efficient countries in the world. We're one of the WORST.
Onward through the fog
Permalink
Ron Steenblik Posted 4:16 pm
03 Jul 2008
What wild streak, Sam?
Your preference to investment in infrastructure rather than subsidizing energy itself sounds sensible to me! And, in fact, many people in progressive Australia and New Zealand hold views similar to yours.
Good point about Japan, too.
These are only my personal opinions.
Permalink
David Roberts Posted 4:27 pm
03 Jul 2008
Yes!
Sam, shifting money from fruitless subsidies and tariffs to infrastructure investment is the best idea I've heard all day. And I bet you could get quite a political coalition behind it. Somebody come up with a slogan!
It's worth noting that smart infrastructure investment will have many of the benefits that tariffs fans and localizers are after -- that is to say, it will make local economies more efficient, productive, pleasant, and resilient.
grist.org
Permalink
WWAGD?! Posted 6:13 pm
03 Jul 2008
Gentle Ben
We could make our own sugarcane ethanol if the Ciaerror Club didn't take away the Everglades sugar growing acreage!
http://timstvshowcase.com/gentleben.html
Permalink
vakibs Posted 10:02 pm
03 Jul 2008
brazilian ethanol means burning rainforest
This is a bone-headed proposal. You either quit using biofuels or grow them in your own backyard.
But as Ron has said, even growing them in the backyard has the effect of replacing soybean farms into corn farms and thereby increasing soybean imports.
The solution : Don't import food stuff ! And don't import ethanol.
US has no need to do any food imports. It has a lot of land available and its environment is less sensitive for biodiversity depletion than tropical rainforests.
If US is so desperate about using the hot humid tropical environments for growing better biofuels, it should lease the land over there, invest directly and claim total responsibility for what happens.
Slimy oil/palm-oil companies do a lot of dirty work behind filling up your gas tanks.
.. that Japan, which imports almost everything, is one of the most energy efficient countries in the world ..
Japan has a huge carbon footprint everywhere else in the world, and it has a huge water footprint. US has of course a ten times larger footprint, but Japan is no inspiration.
Americans, please stop abusing the rest of the world's resources. You live in a land of plenty.
Permalink
Jonas Posted 11:52 pm
03 Jul 2008
Way to go Lugar
Now that Wolverine is living in a cave in North Korea (because North Korea alone was not enough), and now that we have dispelled the myth which says that sugarcane has an impact on rainforest clearing, we can congratulate Lugar with his proposal.
It is really mind-blowing to see the current situation:
-corn ethanol is 8 to 10 times less efficient than sugarcane ethanol; so you need 8 to 10 times more land for the same amount of fuel
-sugarcane ethanol is also up to five times less expensive than corn ethanol
-cane stocks CO2 in soils, as it is a perennial plant.
-cane ethanol hasn't had an impact on world food prices, whereas corn ethanol has had a major one
Biofuels must be produced there where agroecological conditions are most conducive to efficient crop production. That is: the vast subtropical belt in Latin America and Africa.
You can trade them very efficiently (transport in tankers is extremely efficient).
So a slashed tariff would mean Americans get inexpensive, green, climate friendly fuels that do not impact food prices; and the Brazilians, a developing country, becomes wealthier because of it.
This would be a perfect win-win situation.
Permalink
Sam Wells Posted 3:39 am
04 Jul 2008
More on Infrastructure please
Hey I'm not the expert on engineering electric cable transmission, although I've heard about DC technology and stuff that could enable "intelligent grids" right here on Grist.
As to fuels, be it ethanol, natural gas, or crude oil products, I am not so convinced that "playing with quotas" such as Brazilian ethanol will make a fart's difference - and could aggravate further destruction of the Amazon, one of the world's largest reservoirs of freshwater and photosynthetic oxygen.
If one had a policy to use sugarcane for industrial food sweeteners instead of that nasty corn fructose sugar, I guess I would be for it. One small pleasure I have is going to Mexico where Coca-Cola is still make with real, honest sugarcane dextrose - I mean it actually tastes good. Heck with the tequila, I want a real Coke!
Back to the infrastructure concept, "build it and they will come." -sammie
Onward through the fog
Permalink
GreyFlcn Posted 4:27 am
04 Jul 2008
Cerrado > Amazon
As I mentioned over here in response
____
They are however burning the Cerrado for sugarcane. And the Cerrado is even more endemically biodiverse than the Amazon.
http://greyfalcon.net/time
http://greyfalcon.net/cerrado
And "Unica" Brazil's official lobbyist organization for the SugarCane industry know it.
http://www.openpr.com/news/38986/UNICA-Ban-on-ethanol-pro ...
_
As for Sam's comment on Brazil's offshore oil supply. Yeah, they got a lot of that.
http://greyfalcon.net/brazil
http://eia.doe.gov/cabs/Brazil/Oil.html
Permalink
GreyFlcn Posted 4:28 am
04 Jul 2008
doh
As I mentioned over "here" in response
http://blogs.wsj.com/environmentalcapital/2008/07/01/biof ...
Permalink
GreyFlcn Posted 4:34 am
04 Jul 2008
The issue of course with Unica
The issue of course with Unica
Is that they are equivocating biodiversity of non-endemic species, with biodiversity of endemic species.
"Endemic" species are not naturally found elsewhere.
http://en.wikipedia.org/wiki/Endemism
The Cerrado has a gigantic amount of Endemic Species.
http://greyfalcon.net/time
Permalink
GreyFlcn Posted 5:36 am
04 Jul 2008
Kaboom
Hey Steenblik, got a 4th of July present for ya:
Permalink
Sam Wells Posted 5:53 am
04 Jul 2008
Ethanol = enemy of the people
Build the infrastructure and damn the ethanol!
Onward through the fog
Permalink
Ron Steenblik Posted 6:56 am
04 Jul 2008
Thanks, GreyFlcn
I had already posted a link to the leaked World Bank study in a post on the "Revisiting Malthus" string.
These are only my personal opinions.
Permalink
JChan111 Posted 2:08 am
05 Jul 2008
Sugarcane Doesn't Replace Amazon Forrest
As some one correctly pointed out to me on another post here on Grist, Brazilian sugarcane is grown in areas that were once prairie lands essentially, and a recent 1 hour news broadcast on NPR about Brazil also said pretty much the same for the soy bean fields used to supply China with millions of tons of soy annually.
However, has massive worldwide investment in ethanol and the biofuel industry indirectly contributed to an escalation in food prices? Now this is a subject worth more discussion as lands used to grow "anything" bio related will surely displace something else (along with the water and energy needed to pump water from wells), unless it is done purely in an industrial process as some algae derived biofuels might.
Here's the Biofuel Report from July 4th UK Guardian.
Secret Report: Biofuel Caused Food Crisis
-JChan
Permalink
Sam Wells Posted 2:57 am
05 Jul 2008
Bad weather
The effect of bio-fuels on global food prices and markets is really quite marginal, although possibly significant depending on who is doing the math. What perhaps is more important are huge natural disasters such as the failure of the Australian wheat crop. Even disruptions such as a plus-10% hit on corn acreage due to Mid-West flooding can ripple through the markets quite quickly. Many developing countries are facing food shortages because of population growth, poor land management, wars, and so forth. Finally, increasing consumption of meat in countries such as China and India are thought to be problematic as well.
Diversion of foods into bio-fuels only serves to amplify the wild upswing in food commodity prices, although by itself it is not a root cause (nice pun).
By the way, I appreciated the links to the Brazilian sugar cane industry and I learned a lot.
Onward through the fog
Permalink
Biodiversivist Posted 10:23 am
06 Jul 2008
Wrong
Cane ethanol would not be cheap, especially if a price is put on carbon sink destruction.
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
Permalink