Luddites say let them starve

September 3rd, 2012 at 11:00 am by David Farrar

The Herald reports:

A major conference bringing together the world’s biggest players in genetic modification opened to the angry chants of protesters yesterday.

The week-long international agricultural biotechnology conference is being described by those on both sides of the genetic modification debate as a significant event for GM – but for opposing reasons.

Organisers hoped the Rotorua conference would foster collaboration and provide more answers on how GM could assist in feeding a world population expected to double by 2050.

Nope. Those extra people just have to starve as GM is evil.

The chief executive of event hosts NZBIO, Suzanne Bertrand, said GM was one “tool” to advance research.

“New Zealand is feeding about 19 million people out of its agriculture and it is using the latest technology … it’s been using biotechnology for the last 20 years – without it, we would be nowhere,” she said. “Some people say we shouldn’t even touch GE, but as a tool for research it’s very interesting.”

There is huge potential, and none of the scare stories are yet to come true.

Jerome Konescni, who chairs the body that organised the international conference, argued that could not be done using organic food.

“The question I would ask proponents of organics is: if we have to double the world’s food supply by 2050, how are you going to do with it technology that … reduces production rather than increases it?”

But Greens MP Steffan Browning, who hosted an afternoon seminar against GE in a meeting room a few hundred metres away, called the view “rubbish”.

“If our population goes berserk, no system is going to feed the world. But organic and traditional means are going to feed the world better until we hit that point … GE is not going to do it.”

The Green version of “Let them eat cake”.

If the luddites succeed in banning GE, it won’t be the first time their policies have killed huge numbers of people. For years they campaigned on how biofuels must replace oil and demanded big subsidies for them. So farmers all around the world dug up their food producing crops and starting growing biofuel crops instead.

The World Bank has estimated that the push for biofuels has pushed 35 million more people into absolute poverty and resulted in 192,000 additional deaths a year.

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A promising biofuel

December 30th, 2008 at 12:00 pm by David Farrar

The Dom Post reports on Jatropha:

Jatropha is widely viewed as the perfect biodiesel crop because it is pest and drought resistant. Jatropha trees are productive for 30 to 40 years, grow up to 3 metres high and can be grown on challenging arid land so do not compete with food crops.

It needs at least 600 millimetres of rain annually to thrive, but can survive three years of drought by dropping its leaves. More than 800 million hectares of arid and non-arable land around the world is suitable for plantations.

Seeds in the first year after planting. After five years typical annual yield of a single tree is 3.5 kilograms of beans. Oil pressed from 4kg of seeds needed to make 1 litre of biodiesel 1 hectare should yield an average 2.5 tonnes of oil.

In India, where it is widely used as biodiesel to run motor vehicles, the average cost of 1kg of seeds is 6 rupees (NZ2 cents). Refining jatropha oil into biodiesel costs less than NZ$216 per tonne.

The part that I care most about is:

Only a few years ago biofuels were regarded as uneconomical for aviation because they froze at the low temperatures encountered at cruise altitudes.

However, testing has shown that jatropha has an even lower freezing point than current jet fuel.

Personally I prefer my plane’s fuel supply not to freeze in mid flight!

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Paul Walker on food prices

July 25th, 2008 at 2:00 pm by David Farrar

Paul Walker takes a long hard look at the causes of global food inflation. He looks at the three theories:

  1. Newspapers have cited an internal World Bank document as having found that 75% of the price increase was due to biofuels
  2. Several governments and commentators see speculation as a major driving force.
  3. Widely held view has it that rapidly growing food demand in the emerging economies is pushing up global food prices.

So how does theory 2 hold up:

Yet, there is no hard evidence that “speculation” has added much to the price increase on spot markets. After all, it is only when “speculators” actually buy produce on the spot market that they can drive up the price, and this would have to be reflected in growing stock levels – but stocks appear to have declined throughout the period of rising prices

So how about theory 3 – blame China and India:

Food demand in China, India, and other emerging economies is rising as their incomes grow. However, domestic food production in most of these countries is growing in parallel. China, for example, has been a consistent and growing net exporter of cereals (including rice). The Agricultural Outlook expects China’s net cereals exports to decline only very gradually in the coming decade. For India, the picture is similar, though there was significant variability in its net trade position in the past. In short, growing food demand in the major emerging countries cannot be held responsible for the rise in world market prices for cereals.

So that leaves theory 1 – biofuels:

The use of agricultural products, in particular maize, wheat, and vegetable oil, as feedstock for biofuel production has expanded dramatically in recent years. Between 2005 and 2007, i.e. in the period when food prices began to explode, nearly 60% of the growth in global consumption of cereals and vegetable oils was due to biofuels. Global output of cereals and vegetable oil did not decline during that period, but just grew slower than the rapid expansion of use.

In a situation of depleted stocks and very low demand and supply elasticities, this gap between use and output growth has pushed prices up very strongly.

And the conclusion:

Thus we find that there cannot be much in the way of doubt that biofuels are a significant factor in the rise of worldwide food prices. Add to this the fact that other research suggests that biofuel support policies are disappointingly ineffective on environmental grounds, then it should be clear that governments need to reconsider their support for biofuels. But many governments, including New Zealand’s, seem to want to push ahead with such policies despite the kind of evidence Tangermann brings to bear on the issue.

Stefan Tangermann, quoted by Walker, is Director of Trade and Agriculture for the OECD.

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Biofuels forced food prices up 75%

July 6th, 2008 at 3:16 pm by David Farrar

The Guardian (note the source) has a report which lays huge blame on biofuels for the current food crisis. In fact they cite biofuels as being responsible for 75% of food price increases. The secret World Bank report says:

Biofuels have forced global food prices up by 75% – far more than previously estimated – according to a confidential World Bank report obtained by the Guardian.

The figure emphatically contradicts the US government’s claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.

“Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises,” said Robert Bailey, policy adviser at Oxfam. “It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat.”

Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as “the first real economic crisis of globalisation”.

Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.

“Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate,” says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.

It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

“It is clear that some biofuels have huge impacts on food prices,” said Dr David King, the government’s former chief scientific adviser, last night. “All we are doing by supporting these is subsidising higher food prices, while doing nothing to tackle climate change.”

Of course this doesn’t stop Labour and the Greens with pushing ahead for mandatory biofuel uptake in NZ. Hey what’s an extra hundred million people in poverty so long as we are environmentally pure.

Hat Tip: Paul Walker

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UN Sec Gen calls for end to food tariffs and biofuel subsidies

June 4th, 2008 at 6:54 am by David Farrar

Some common sense and plain speaking from UN Secretary-General Ban Ki-moon who has called for an end to food tariffs and to subsidies for biofuels as the key way to bring down the price of food and stop millions from starvation.

Sadly this advice will be ignored by the Greens and NZ First who both support protectionist policies such as tariffs.

Also interesting debate on how much biofuels are to blame:

Hunger campaigners single out biofuels – often made by converting food crops into fuel – as a prime culprit for the crisis.

Biofuel supporters say the effect on food prices of diverting crops into ethanol production is small.

US Agriculture Secretary Ed Shafer said before the summit began that biofuels accounted for about 3 per cent of the total food price rise.

But the Oxfam aid organisation says the real effect is about 30 per cent.

It is sort of ironic that us free traders are on the side of the UN and Oxfam while the Greens seem to be in the same camp as the US – supporting tariffs and biofuels.

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Key on Emissions Trading Scheme

May 18th, 2008 at 5:39 pm by David Farrar

John Key devoted most of his speech at National’s LNI conference today to the legislation setting up an Emissions Trading Scheme (ETS). He made very clear on numerous occassions that he supports an ETS as the best response to the challenges of climate change:

It is to that end that we consider a well-designed, carefully balanced Emissions Trading Scheme (ETS) to be the best tool available for efficiently reducing emissions across the economy.

He then pointed out some issues with the current legislation:

  • Submitters on the bill have had their speaking time cut drastically short.
  • There’s been little transparency about the effects the ETS will have on already struggling Kiwi households.
  • Officials have admitted that the Government will profit by between $6 billion and $22 billion from the tendering of emissions permits.
  • No clear analysis of exactly how much the scheme will reduce emissions, and
  • The scheme has been subject to last-minute changes, including the decision to push out the date for inclusion of the transport sector. This decision has flow-on effects that the Select Committee has been given no opportunity to analyse.

Now this legislation is incredibly complex. It took years for the EU to get their scheme worked out. In fact it is so complex that a lobbyist involved with the scheme remarked to me he figured there were only three MPs in Parliament who truly understood it. They were Jeanette Fitzsimons, Michael Cullen and Nick Smith. I inquired as to their view of the understanding of the Minister on charge of the legislation, David Parker, and they were adamant he is truly out of his depth. But they reassured me this was not a problem as he has been cut out of the decision making loop on it.

Labour has been racing towards a political deadline – the 2008 election – and has been prepared to cut corners to get there.

National is not prepared to cut those corners. Not when the financial security of Kiwis is at risk. Not when getting this wrong means exporting jobs, ratcheting up inflation, and viciously squeezing household budgets.

We believe that the current rushed timetable for the design of the ETS and the Select Committee process is reckless, given the importance of the issue. National thinks that this process, left unchecked, is likely to lead to an ETS that will meet neither New Zealand’s economic needs nor our environmental obligations. In particular, it could well have negative and unintended consequences.

So today, I am calling for a delay in the passage of this legislation.

The fact there is an election later this year is no reason to rush the scheme into law. Hell Labour signed up to Kyoto in 2000 and have had eight years to get policy on place. Just because they left it so long is no reason to sacrifice good decision making in a mad rush. And look at the last law pushed through with lots of last minute changes – the Electoral Finance Act.

Now some will say that Key is being populist or playing it safe by calling for a delay. Far from it – his move is in face very much against what is best for him politically. Assuming National wins the election, he will have prime responsibility for getting an ETS into law as soon as possible, and in a way which actually will reduce emissions but not drive industry offshore. There is no way the Greens and environment groups would allow National to do nothing, even if they wanted to.

It would in fact have been politically far easier to let the hapless David Parker rush through the legislation in June and July, and then Key could just blame the previous Government for it, as problems emerged. But by having it pass when he is Prime Minister, Key will be responsible for its implementation.

Let me state clearly: National has not given up on this legislation. We are committed to a well-considered, carefully balanced Emissions Trading Scheme for New Zealand.  We believe this bill can be amended and progressed to that end, and we believe it can be done in a timely fashion.  But the New Zealand Parliament must take the time needed to get it right. New Zealanders’ livelihoods depend on us taking that time.

I have no doubt there will be some mindless abuse which will probably try to paint this as something it is not. But talk to anyone involved with this legislation and you would know the folly of trying to have it reported back to Parliament next month. It is the biggest change to the NZ tax system in 20 years. It is incredibly complex and the current bill will have to be so amended that it is only common sense to allow affected parties a chance to resubmit on the amended law.

National believes that getting it right means adhering to the following principles:

  1. The ETS must strike a balance between New Zealand’s environmental and economic interests. It should not attempt to make New Zealand a world leader on climate change. Kiwis simply can’t afford to pay the price for that particular experiment.
  2. The ETS should be fiscally neutral rather than providing billions of dollars in windfall gains to the government accounts at the expense of businesses and consumers.  National does not think it’s responsible for government to use green initiatives to pad the Crown coffers while thinning out Kiwis’ wallets.
  3. The ETS should be as closely aligned as possible with the planned Australian ETS, with common compliance regimes and tradability.  In my second speech as National Party Leader, I called for close co-operation with our biggest trading partner on this issue, and I continue to call for it.  Given the Australian timetable for developing an ETS, I believe it’s still possible.
  4. The ETS should encourage the use of technologies that improve efficiency and reduce emissions intensity, rather than encourage an exodus of industries and their skilled staff to other countries.
  5. The ETS needs to recognise the importance of small and medium enterprise to New Zealand and not discriminate against them in allocating emission permits.
  6. The ETS should have the flexibility to respond to progress in international negotiations rather than setting a rigid schedule. This way, industry obligations can be kept in line with those of foreign competitors.

I think No 2 and No 3 are key. The ETS should not be a get rich scheme for Dr Cullen at the expense of consumers. But having it tied into the scheme of our largest trading partner is quite vital. No 5 is also important – big businesses should not get an unfair advantage over smaller businesses with the allocation of permits.

Key also touches on the proposed ban on new thermal power, and that as 75% of new power generation under Labour has been thermal, it is dangerous to assume one can suddenly go to 0% thermal for further generation. With the massive delays in getting RMA consent for renewable power projects, there would be a real risk of NZ having insufficient power in the future. The best thing one could do for the environment would be to reform the RMA so one can get renewable power projects built more easily. Until you do that, you can’t ban more thermal.

And finally Key touched on the biofuels legislation, which the Parliamentary Commission for the Environment said should be voted down. Key says:

The Parliamentary Commissioner for the Environment has spoken out against the Biofuels Bill, saying it will damage our clean, green image.

National is opposed to a mandatory biofuels obligation until there is a sustainability standard. This standard needs to deal with the lifecycle emissions savings, the effects on the food supply, and the biodiversity impacts.

New Zealanders want to ensure that their efforts to tackle climate change are doing more good than harm. Paying an extra 7 cents a litre for a flawed biofuels policy is not the way forward.  So National will not support the Biofuels Bill in its current form.

Even the Greens say the biofuels bill should not pass in its current form.

So a key speech on environmental issues, and good to see a commitment to getting the policy right, even though it would be politically expedient to let Labour pass a flawed ETS and then just blame them when it goes wrong.

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ETS in danger

May 1st, 2008 at 9:44 am by David Farrar

The Government’s Emissions Trading Scheme may be heading the same way as their Biofuels legislation – with growing realisation the cures may be much worse than the disease.

Colin Espiner blogged yesterday that “climate change policies no longer sustainable”. This may be the first instance of a press gallery journalist saying that, and this week could be seen in future as the tipping point. Quoting Espiner:

A year sure is a long time in politics. Remember “sustainability”? Remember how New Zealand was going to become the world’s first “carbon neutral” country? Remember electric cars, 90% renewable energy, bold plans to slash vehicle emissions by 40%?

The United Nations sure does. It’s awarded Prime Minister Helen Clark a gong for her commitment to fighting climate change, despite the fact that not a single of these pledges has yet been formally implemented, let alone had any effect. Our carbon emissions went up last year, not down. They’ll probably be up again this year.

And yet funnily enough you don’t hear much from the Government these days about sustainability. The plan to allow councils to whack an extra 15c on to every litre of petrol is on the back-burner. The idea to force petrol companies to blend their gas with a minimum 5% biofuel suddenly doesn’t seem like such a good idea when respectable environmental lobby groups are warning that most of the world’s biofuel production is unsustainable, is being achieved by felling rainforest, and has led to a huge increase in world food prices.

Add to this that the scheme at the heart of the Government’s ambitious plans to tackle climate change, the Emissions Trading Scheme (ETS), is under heavy fire, and not just from the usual suspects. A bevy of reports from respected consultancies and research firms like the Cawthron Institute, the Institute of Economic Research, and Infometrics say the ETS will cost the country a fortune, will only result in a marginal reduction in greenhouse gas emissions, and could have severe unintended environmental side-effects.

Coming up with solutions which are good for the Environment and do not hurt consumers and businesses greatly is not easy. This is why soundbites such as “carbon neutrality” are so irresponsible. It’s also one reasons why I support roll out of fibre to the home – it is one of the few policies which should be both good for the economy and good for the environment.

Paula Oliver in the Herald reports the Government is now considering delays, as sticking extra costs on petrol at a time when prices are already record high will probably just be seen as revenue collecting. The beneficial effects of encouraging more fuel efficient vehicles and more public transport use are already happening at $1.85 a litre I suspect and a few cents more may have little effect except to piss people off.

Timing is everything sometimes!

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Mike Moore on food

April 28th, 2008 at 9:43 am by David Farrar

Mike Moore writes in the Herald on the food crisis:

What has been the most successful 50 years of alleviating poverty in human history is threatened. What’s happening, what’s new?

Nothing is more important than food. In 12 months, corn and rice prices have doubled, wheat price tripled, soy beans up by 87 per cent, and global food reserves are at their lowest levels ever.

They are staggering increases for just one year.

The rush to biofuels is also impacting cruelly in agriculture, where massive subsidies and high oil prices are encouraging agricultural production away from basic foods. Tragically, rich countries are subsidising bio-fuel production, raising prices. Filling a Range Rover with subsidised ethanol takes as much “grain” as would feed an African family for a year. Rich countries’ fuel substitution programmes often consume more energy to produce than they save. It’s a populist Green response to global warming that does the opposite of what was intended.

People should reflect that Federated Farmers have warned that if the price of carbon reaches $50 then the Emissions Trading Scheme would stop basically all food production in NZ – profits are projected to drop 123%. Now before everyone accuses them of scaremongering – what would have been your reaction if say ten years ago someone predicted biofuels would help push 100 million people into poverty and contribute to a doubling of world food prices?

But how can you encourage poor countries to grow food when subsidies from rich countries can drop similar products into their local market, sometimes at a third of local prices?

The medium- and long-term solution is the Doha Development Trade round, which is now at a critical stage. Unless the players at the WTO can get closer in the next few weeks, the deal will not be cut this year.

I could not agree more. Countries at the WTO who do not stop subsidising their food, are a big part of the problem.

If the rich countries cannot find the political courage to front their subsidised farmers when food prices are so high and will remain high, when can they summon up the willpower to save themselves? Subsidies in rich countries are a direct cash transfer from the poorest consumers to the richest of producers.

Indeed. Yet strangely it is so called left wing politicians like Obama and (H) Clinton who rail against free trade,

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Unintended consequences

April 17th, 2008 at 11:08 am by David Farrar

The issue of biofuels is a great example of the law of unintended consequences. People insist that something is the answer, and that it must be supported, and they don’t realise what the flow on effects may be.

Biofuels have been touted as a partial solution to global warming, so governments passed laws mandating more biofuels must be used. I mean how could anyone object to more use of an energy source you can grow in the ground.

And so as the demand for biofuels increased by fiat, the supply was forced to increase. And hence farmers started growing more corn to produce ethanol for biofuels. Now again, who would object to that?

But wait. What did those farms use to produce? Oh minor stuff like wheat. So farms start producing less wheat. But people still want just as much wheat, so what happens? Oh yes the price of it goes up. And what does that mean? It means more people starve in the third world.

The Independent is a left of centre UK newspaper. Some useful quotes from this article:

Amid growing evidence that massive investment in biofuels by developed countries is helping to cause a food crisis for the world’s poor, the ecological cost of the push to produce billions of litres of petrol and diesel from plant sources will be highlighted today with protests across the country and growing political pressure to impose guarantees that the new technology reduces carbon emissions.

You see markets and incentives are very powerful things. The moment you tilt the field one way, it can have unimagined consequences.

The World Bank and the UN have, in recent days, expressed concern about the impact of biofuels on world food prices, sparking riots from Haiti to the Philippines. Gordon Brown, who has put the issue on the agenda at the forthcoming G8 summit, has also voiced concerns at EU level about deforestation and loss of habitats caused by biofuel production.

But who is to blame? Maybe those leaders who passed laws mandating biofuels?

But hey if a few extra hundred thousand people starve because of biofuels, isn’t that a price to pay for saving the planet from global warming?

Researchers at the University of Minnesota published a study in February this year which found that growing biofuel crops on converted rainforests, grasslands or peat bogs created up to 420 times more CO2 than it saved.

Whoops.

Hat Tip: Whoar

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Huge blow to Government on Environment

April 3rd, 2008 at 1:37 pm by David Farrar

The Government has trumpeted biofuels as part of its environmental and energy strategy. Helen Clark announced it last year.

I believe New Zealand has the potential to lead the world in its commitment to renewable energy.

On biofuels, the time has come to implement a sales obligation.

Biofuels can replace diesel or petrol, and reduce our greenhouse gas emissions. With domestic production they can also be positive for the current account.

The government has decided that a Biofuel Sales Obligation will be set at 3.4 per cent of the annual energy content of total annual petrol and diesel sales by 2012. This initial target is considered sufficient to encourage the uptake of biodiesel and the development of infrastructure for ethanol distribution.

NZPA have just reported the following submission from the Parliamentary Commissioner for the Environment on Helen’s biofuels legislation:

The Government’s biofuels legislation has been dealt a major blow, with the Parliamentary Commissioner for the Environment calling for it to be scrapped. …

But Parliamentary Commissioner for the Environment Jan Wright today told the committee the bill had major problems and would possibly do more harm than good.

While biofuels had a big advantage over fossil fuels in that they absorbed carbon dioxide while they were growing — potentially lowering their emissions — some had a carbon footprint equal to or higher than fossil fuels due to high emissions from infrastructure and cultivation. …

To meet the mandatory requirements New Zealand would have to import biofuels, which in some cases were worse than fossil fuels.

Ms Wright said the growth of biofuel crops overseas could also result in the felling of forests to free up land and shortages in land for food production that would push up prices disadvantaging the world’s poor.

Ouch. Eight years of huge growth in greenhouse gas emissions, and the Government’s sole response has been we have developed some really good policy.  That policy isn’t looking so flash now.

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