The World Bank seems to have bought back some karma recently. Sort of. They have studied the effects of biofuels and the correlation of its use with the current global food crisis. A whopping 75% of the increase in the price of food can be linked to the increased production of biofuels. This is a far cry from the They are stalling on its release “to avoid embarrassing President Bush”. However, the Guardian has obtained a copy of it and has this to say,
“Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate” says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.
It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher. “
The effects of market speculation aside, what we have here is more damning evidence (and here) that the U.S. ethanol energy policy is a knee-jerk reaction that is costing the nutrition and well-being of the world’s poor, not to mention the time and effort spent by the U.S. chasing fools gold. Once again, my father was right.
