Thursday, March 26, 2009

Ethanol Importation from Brazil

Two weeks ago, President Lula of Brazil visited the White House. What was most news-worthy from the climate-security perspective is their discussion of trading Brazilian sugar-based ethanol. It is no surprise that Lula favors an opening of the U.S. ethanol market to imports; Brazil has an established and productive ethanol industry. President Obama -- who supported ethanol during the campaign (particularly in Iowa) -- said:

"I know that the issue of Brazilian ethanol coming into the United States
has been a source of tension between the two countries. It's not going to
change overnight, but I do think that as we continue to build exchanges of
ideas, commerce, trade around the issue of biodiesel, that over time this source
of tension can get resolved."

Although this is a classic politician's dodge, he does seem to understand that our current policies are not economically, scientifically, or environmentally sustainable. Perhaps Obama can make some changes to undo the twisted problems that political interference has brought to this market.

Ethanol is one of the most fraught problems in the nexus of climate and energy security. Several years ago, when it was first starting to get ramped-up in the U.S., it was seen as one of the easiest win-wins around. Not only did you get to support 'family farmers' you also got to fight global warming and reduce the importation of foreign oil. Unfortunately, it hasn't turned out to be that simple. It turns out, that when you take land-use into account, corn-based ethanol may not actually be good for the climate. While it has been marginally beneficial in reducing dependence on foreign oil, it probably had the unforeseen problem of raising food prices.

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