Lets us do the job for the rest fo the world:
SIR – You do well to flag up the environmental and economic ambiguities of fuel-ethanol production (“Dirty as well as dear?”, January 17th). However, there are clearer messages emerging than you suggest. The International Energy Agency (IEA) has found that although in a few cases ethanol production uses more energy and produces more greenhouse-gas emissions than the petrol it would displace, recent large-scale production practices do pretty well, providing a net energy gain of 30-40% compared with petrol and reduced emissions. Most recent studies, except that of David Pimentel, agree on this. In the future, ethanol derived from cellulosic feedstocks (using biomass to provide the process energy) will do much better, reaching a 70-90% gain. In Brazil this production method appears to achieve this level of performance today. Ethanol in Brazil also costs much less to produce than in member countries of the IEA, where the cheapest production is still double the price of petrol. That said, the costs are declining as technologies improve, and there are increasingly valid grounds for growing government support.
The obvious policy advice is that any subsidy for ethanol production should be sensitive to the energy inputs, emissions and other environmental impacts of production, and that it may make sense to develop an international trade in ethanol and let those who do it best (eg, Brazil) help to supply the rest of us.
Lew Fulton
Tom Howes
IEA
Paris
economist.com |
