People Harmed by Capitalism or by "Green" Policies?

by Don Boudreaux on April 17, 2008

in Current Affairs, Energy, Entertainment, Myths and Fallacies

Indur Goklany’s 2007 book, The Improving State of the World , is impressively fact-packed and well-argued.  I recommend it highly.  I recommend also his op-ed appearing in today’s edition of the New York Post.  Here are a few paragraphs.

President Bush’s call yesterday for a dramatic slowdown of
green-house-gas emissions reflects growing concern for the consequences
of climate change. But what about the consequences of the world’s
response?

The fact is, food riots resulting partly from the
United States’ alternative energy policies have arrived at our front
door. Crowds of hungry demonstrators swarmed the presidential palace in
Haiti last week to protest skyrocketing food prices.

In recent
years, we’ve heard that climate change could be catastrophic for nature
and humanity. But it’s becoming increasingly evident that over the next
few decades, climate-change policies could prove even more
catastrophic.

….

Supposedly climate-friendly policies in the United States and the
European Union – subsidizing the production and consumption of such
renewable biofuels as ethanol and biodiesel – have diverted such crops
as corn, soybeans and palm oil from food to fuel. This, in turn, has
increased prices for food worldwide at a time when the highly populous
and newly prosperous East and South Asian countries are demanding more
of it.

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{ 27 comments }

Marcus April 17, 2008 at 7:29 am

I was looking at pictures of those protesters in the WSJ the other day and wondered to myself how unproductive it all was.

Like truckers protesting high fuel costs. Why do people think governments can solve these kinds of problems? Why would you want it to?

It seems to me when you see high prices you're seeing opportunity. Right now we hear about the strains put on truckers but in a few months we'll be hearing about those companies that came up with innovative ideas to be more efficient than their competitors.

shawn April 17, 2008 at 8:29 am

marcus…I agree about govt. not solving problems…but they certainly could stop causing them, as this green-policy-mania is certainly doing.

So, in that, we could storm some government buildings…figuratively, of course.

vidyohs April 17, 2008 at 8:41 am

Shawn,

Your post contains the wisdom necessary to rectify the situation, but I don't think you realize it.

First, the government is perfectly willing to kill you to retain control. Second, as long as they know you will only respond figuratively they know they have nothing to fear.

Why we lost control and our freedom, we became afraid to act; and, only respond figuratively.

Methinks April 17, 2008 at 9:58 am

Marcus,

Government caused the problem in the first place. These "green" policies are anything but. There may be opportunity, as you point out – but to rent seek, as all of this stuff is subsidize. All this opportunity causes more harm to the environment. Expanding "renewable" fuels means more deforestation to clear the farm land necessary to grow "renewable" energy. But what else can we expect from government subsidized inefficiency?

Gil April 17, 2008 at 10:06 am

. . . from your cold dead hands . . .

Marcus April 17, 2008 at 10:12 am

Government caused the problem in the first place. These "green" policies are anything but. There may be opportunity, as you point out – but to rent seek, as all of this stuff is subsidize. All this opportunity causes more harm to the environment. Expanding "renewable" fuels means more deforestation to clear the farm land necessary to grow "renewable" energy. But what else can we expect from government subsidized inefficiency?

I think maybe my post was unclear. When I wrote about opportunity I was referring to the higher fuel prices truckers are paying, not the food costs.

You are, of course, correct. The problem with higher food costs appears to be poorly conceived government policies. The solution then is to eliminate those policies.

John V April 17, 2008 at 11:04 am

marcus,

Why do people think governments can solve these kinds of problems?

just because….

Floccina April 17, 2008 at 11:06 am

It is a short term problem. In agricluture higher price will produce more supply. You can count on it. Still bad but should not fester unless more and more contues to go to fuel.

John V April 17, 2008 at 11:11 am

This nonsense is nothing new. I'm self-employed as a restaurant owner and I feel it as well. Compared to a few years a ago, some of food supplies are a lot higher…..flour being the latest. It has tripled since last september. I just recently raised my prices.

As I watch politicians trying to gain votes by promising to slay the beast, I simply cannot stop thinking of how they caused this in the first place. Ethanol was something I decried a few years back and it's really starting to take hold now. The ripple effects are incredible….and with no net improvement on its original task(big surprise!).

The simple fact is that our problems are wrought by POLICIES not natural forces of business. It's undeniable, unmistakable and unavoidable. Watching people pretend otherwise is simply sickening.

John Dewey April 17, 2008 at 11:43 am

floccina: "In agricluture higher price will produce more supply."

You are correct, floccina, but I do not think this is a short term problem.

The demand for non-food uses of food crops will continue to grow. That's because governments continue to demand more biofuels. Higher supply will not mean lower prices if demand continues to grow. As a result, food prices will remain high for as long as governments mandate biofuels. As I see it, the reduced standard of living caused by government-mandated misallocation of resources is not a short term problem.

Methinks April 17, 2008 at 12:00 pm

When I wrote about opportunity I was referring to the higher fuel prices truckers are paying, not the food costs.

Thanks for the clarification. I thought you were talking about the not so green "green" alternatives. However, in terms of petroleum too, government has a hand in driving up pices. Note the onerous regulations and prohibitions on drilling imposed on oil companies which serves to reduce supply.

Sam Grove April 17, 2008 at 12:06 pm

In agricluture higher price will produce more supply. You can count on it.

Only if higher profits are involved.

FreedomLover April 17, 2008 at 12:10 pm

It's very simple. If you go against the global warming god, you get smacked down HARD. On the net, in social circle and professionally. In fact, if you don't toe the leftist orthodox line in this country to a T, you risk death.

Mcwop April 17, 2008 at 12:12 pm

In agricluture higher price will produce more supply. You can count on it.

Only if higher profits are involved.

And other factors fall into place, such as abundant water, electricity, fuel prices, fertilizer prices, increased stocks, demand not growing faster than new supply, hectares devoted to crops etc….

FreedomLover April 17, 2008 at 12:13 pm

Methinks – with all these onerous regulations and what not, it's a wonder our economy functions at all.

shawn April 17, 2008 at 12:58 pm

well, freedomlover, maybe not quite death. :) Though, it's been…professionally difficult…to question sustainable/green design from within.

FreedomLover April 17, 2008 at 4:32 pm

Shawn:

My point is that the leftist orthodoxy being what is, you can't even speak up in public for fear of total social ostracism. It's like I have to go to Kansas City to find people who agree with me on this, but then I'll totally disagree on religion with them.

Methinks April 17, 2008 at 5:35 pm

you can't even speak up in public for fear of total social ostracism.

Fear? I welcome ostracism by these asshats. I was once treated to a morning of glaring when it became known that I was an evil non-Marxist. I glared back – that put an end to it. They can dish it out, but they can't take it.

mnm April 17, 2008 at 8:26 pm

Once again, Methinks, you've said it well, and have me wishing there were more women in the world like you.

I suspect that so-called "green" policies are really more about appeasing the consciences of their advocates than helping the environment.

Mick April 17, 2008 at 9:42 pm

Let them eat green cake!

Ken April 18, 2008 at 3:13 pm

While I agree philosophically with the sentiment that poor policy causes massive problems, I would like to see a quantitative analysis of the degree to which "green" policies, specifically ethanol subsidies, have contributed to the increase in food prices. Is anyone aware of such an analysis?

Regards,

Michael Sullivan April 18, 2008 at 3:26 pm

It's a bit unfair to put ethanol subsidies completely on the "leftist global warming orthodoxy". Most of your leftist environmentalists would tell you that corn ethanol is at best *arguably* a bare net positive replacement for petroleum on environmental grounds, and would gladly take that subsidy money away and use it to subsidize research or production of fuels that actually lower greenhouse emissions significantly.

The real driver of the ethanol subsidy is the same faction that drives all agricultural subsidies — agribusiness.

As a leftist environmentalist, about the best thing I can say for ethanol subsidies is that at least that money isn't getting spent on making war.

Sam Grove April 18, 2008 at 3:47 pm

As a leftist environmentalist, about the best thing I can say for ethanol subsidies is that at least that money isn't getting spent on making war.

I doubt that those funds have any impact on the war. They've been printing all they need to cover both.

FreedomLover April 18, 2008 at 4:11 pm

As a leftist environmentalist, about the best thing I can say for ethanol subsidies is that at least that money isn't getting spent on making war.

Posted by: Michael Sullivan | Apr 18, 2008 3:26:36 PM

Can you call daily patrols in Baghdad "war"? I don't see armies of tanks clashing in the desert. THAT would be war.

Sam Grove April 18, 2008 at 4:48 pm

Can you call daily patrols in Baghdad "war"?.

I think they call it 'asymmetric warfare'.

Mesa Econoguy April 18, 2008 at 6:52 pm

Here is another related article from today’s WSJ about how

Our Climate Numbers Are a Big Old Mess

Not to bring back bad memories, but Muirgeo once posed the question to me “Do you think scientists just make this stuff up?”

Well, yes. See above.

At least they make up their flawed statistical methodologies, which yield false results, especially if they are the results they are seeking.

Incidentally, this is why so many engineers take “climate science” apart so quickly & easily.

mopey April 21, 2008 at 4:54 am

to be fair, ethanol policies aren't the only cause
"new customs procedures aimed at collecting revenues and stopping the flow of drugs has left tons of food rotting in ports"

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