A Government Program Even the Times Doesn’t Like
On the heels of the latest food riots, the New York Times editorializes today that “the time has come to put an end to subsidies to transform corn into ethanol.” The Times is another in a growing list of parties from all parts of the political spectrum who see the folly of ethanol. Literally, we are burning food to produce a fuel that is more expensive than gasoline and that has no proven long-term benefit. In fact, given the large amount of water required to produce ethanol and increased greenhouse-gas emissions from land-use changes, ethanol may yield a net loss for the environment.
It is already a net loss for the world’s poor, as the production of ethanol from corn has contributed to higher global food costs and the resulting food riots. Granted, there are other factors in the rise in food prices, including the fall of the dollar, dry seasons in wheat-rich countries like Australia, and increased demand for meat and other foods from developing countries like China. However, unlike these factors, U.S. ethanol policy is politically motivated (think Iowa caucuses and eco-activist appeasement), not dependent on weather, global finance, or global development. More than with any other factor at play, the president and the Congress can alleviate the damage to food prices by correcting their failed corn-ethanol experiment, a perfect example of the dangers of government’s picking winners and losers in the marketplace.