Even as Congress was mandating large increases in the consumption of biofuels a decade ago, the world was changing. In the early 2000s, replacing fossil fuels with biofuels made from corn, sugar, or oilseeds seemed like a good idea. Increased crop demand would prop up prices for farmers, and replacing petroleum with renewable energy would reduce greenhouse gas (GHG) emissions and promote energy independence.
In the late 1990s and early 2000s, agricultural commodity prices reached new lows and subsidies and mandates to promote biofuels seemed like a solution for multiple problems.
Scarce resources. Climate change. Population growth. Rising food prices. Feeding the world’s hungry will require a giant leap in agricultural innovation. In a new working paper, senior fellow Kimberly Elliott explores how advance market commitments could pull the private sector into producing for the world’s poor.
The White House and the World: A Global Development Agenda for the Next U.S. President shows how modest changes in U.S. policies could greatly improve the lives of poor people in developing countries, thus fostering greater stability, security, and prosperity globally and at home. Center for Global Development experts offer fresh perspectives and practical advice on trade policy, migration, foreign aid, climate change and more. In an introductory essay, CGD President Nancy Birdsall explains why and how the next U.S. president must lead in the creation of a better, safer world.
While the precise contribution of biofuels to surging food prices is difficult to know, policies promoting production of the current generation of biofuels are not achieving their stated objectives of increased energy independence or reduced greenhouse gas emissions. Reaching the congressionally mandated goal of blending 15 billion gallons of renewable fuels in gasoline by 2015 would consume roughly 40 percent of the corn crop (based on recent production levels) while replacing just 7 percent of current gasoline consumption. The food crisis adds urgency to the need to change these policies but does not change the basic fact that there is little justification for the current set of policies.