Bio Products Opportunity

I spent most of yesterday ashamedly not doing much work, at work. [As a personal aside, I really don’t like the feeling I get when i know i’ve wasted a day. The positive side effect is I did spend a lot of time reading interesting news sources and generally catching up on the details of current events.

Anyhow, back to my topic of the post. I’m a pretty regular reader of the Economist, but I’d never until yesterday, ventured in to their blog list. I recommend that you take a look. Its even more breif in its factual coverage than a lot of the articles, but the opinions are deeper and the comments cleverer and that’s what makes the reading fun. Readers can respond to posts or to articles from the main edition, and the authors will get back to them on this forum, making for some interesting interactions.

What caught my eye today was a short post on the effect biofuels have had on the price of food. Most readers will understand the food vs fuel dilemna, but the article the post references from The Financial Times is about the effect of the hike in prices on the UN World Food Programme. I have to confess that the impact of higher commodity food prices would affect UN food distribution hadn’t even crossed my mind until reading about it this morning.

I’ve already gone over on this blog some of my reticence about Biofuels/Biodiesel/Biomass as sources of energy and food vs. fuel is close to the bottom of my list of impacts I care about. Mostly, because as I understand it its not a problem of actual production, its a problem of subsidies. That is, something that could be resolved with better management of agricultural incentives. We can, and have, always produced too much commodity foodstocks, so there is room for biofuel feedstocks, the problem is that farmers are either paid to not produce (this is switching since the cost of feedstocks has now jumped high enough for it to be more profitable to plant than just get paid) and that prices have been artificially inflated by a lot of press and speculation. I predict, and this isn’t original at all, that before the end of the next growing cycle, prices will drop back down to a reasonable level. There is, quite simply, enough corn to go around, and there will be even more soon with all the planting people have done. Not to mention that the most common biofuel is actually sugarcane-based ethanol and not corn-based ethanol — and though we do eat sugar, there are a lot of other sources of it.

Whats striking to me is that the temporary hike in prices is having a pretty detrimental effect on the world’s absolute poorest — those that litterally cannot feed themselves. I think this plays into the North-South divide on climate change and environmental considerations in general. [For more on what “North-South” means, click here.]

Thats a big topic right there, one I’m not going to go into too much except to say that I’m often frustrated by the patronizing message of Northern environmentalists towards the South. I ascribe to the idea that it is MUCH more important for the South to be able to develop as cheaply as it can — in the long term that is the only way to resolve global environmental problems. For the record, I also don’t think coal is all-evil, and fighting coal plants is detrimental to development and to finding technological solutions to cleaning coal up.

Oh no, I’m slipping into a whole other post. I promise to write more on that topic, but for today, lets stick to Biofuels.