Thursday, September 13, 2007


"There Ain't No Such Thing As A Free Lunch" is one of the most fundamental and most enduring ideas in Economics. Interestingly enough the above expression expresses the same principle that ecologists consider to be paramount; everything is connected to everything else.

When would the "shallow" environmentalist, the world over, start applying the lessons of their discipline ?Don't we have the right to expect a policy designed to be environmentally friendly to live up to its billings or have we gotten soused to sloppy thinking that we have become enamored of faddish behaviour, superficial thinking and yes, even the willingness to deceive.

To understand that ethanol is not a solution to the energy crisis and that it should not be encouraged is a no-brainer. Studies have demonstrated clearly that the production of ethanol from corn in the US uses more energy than the energy that is produced as an output in the process. Add to that the evidence that a strong mixture of ethanol in the fuel appears to be corrosive and the obvious fact that there is no infrastructure to transport ethanol and distribute it across the land and it becomes rather clear that this so called solution is actually one way to aggravate the problem. But if we are to gloss over all of the above glaring shortcomings of ethanol production there is no excuse for not having seen that the rush to grow more subsidized corn by the farmers can only create a shortage of other crops whose production is replaced by corn. And sadly this is exactly what has happened. The projected wheat crop in the US is going to be smaller than expected and that, combined with an Australian draught , has resulted in a major increase in the price of wheat. The future contract hit today an all time high of over $9 per bushel. The price has more than doubled since April.
Ironically the poor nations will suffer the most as a result of our misguided "environmental" policies. The poor will have to deal with a greater incidence of malnutrition, we will have higher food prices, rich ethanol producers , corroded internal combustion engines and no relief from the energy shortage. Oh what tangled webs we weave when first we practice to deceive.

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