Top economist: Bio-fuels may lead to land shortages

Hans Werner Sinnas warns of "serious conundrum" embodied by energy production vying with food yields.

May 6, 2010 05:29
3 minute read.
Hans Werner Sinn.

hans werner sinn 311. (photo credit: IFO Institute)


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Creating large amounts of bio-fuel raises a serious conundrum not felt since the Middle Ages, noted German economist Hans Werner Sinn told The Jerusalem Post Tuesday.

The president of the Ifo Institute for Economic Research was visiting Israel to give the D.B. Doran Lecture on Population, Resources and Development at the Hebrew University of Jerusalem Tuesday night.

In much of the world, bio-fuels are produced from food crops using vast amounts of land, Sinn explained, which means that energy and food are now competing for the same space and resources. That hasn’t happened since the Middle Ages, when energy meant horses to ride or pull things, and they needed hay to eat.

The Industrial Revolution introduced coal as an energy source and freed up land to be planted for food. The major population boom that occurred in the years since can be traced to that shift. At the dawn of the industrial age, there were approximately 600 million people in the world, he said.

“And now there are seven billion, which means that linking the cost of energy and the cost of food is much more problematic. Food riots in 2007 and 2008 can be attributed to the rapid increase in bio-fuel production, particularly in America,” he told the Post.

“When we look back from 2050, it may be that the tortilla crisis in Mexico City in January 2007 will represent a turning point,” he added. Tortillas suddenly became an expensive food as ethanol drove international corn prices up.

In the US, bio-fuel is made from corn in the form of ethanol; in Europe it is made from soy, and in South America from sugar cane.

As farmers realized that it was more profitable to plant food for bio-fuel than food to eat, they switched over and caused a decrease in the amount of available food, the economist argued.

Yet bio-fuels would require an enormous amount of land to even attempt to offset fossil fuel with the current state of technology, Sinn said.

“If one would replace just the energy needed for transportation, which is one fifth of the energy man uses, we would need the total acreage of the world planted as bio-fuel crops,” he pointed out.

This is a major puzzle, because Sinn believes bio-fuels are the only real alternative energy sources that have a chance to edge out fossil fuels. However, current technologies just aren’t up to meeting the quantities needed. He did acknowledge that algae, which can be grown off-shore, or biomass to liquid (BTL), when they came of age, could perhaps be part of the solution.

“While connecting the price of food and energy means that the price of oil can be held in check – if the price gets too high, people will buy bio-fuel instead – it is also causing oil producers to panic and pump as much oil out of the ground as possible before it runs out” or people move away from carbon-based fuel, Sinn posited.

The inadvertent non-environmental effects of the green movement are the subject of his forthcoming book in English, The Green Paradox from MIT Press. The book has come out in German in two editions already.

Sinn painted a grim picture and did not see any policy tools to correct the problem.

“The policy set is pretty empty,” he said. “It’s a vicious triangle – you have three goals, but you can only satisfy two.”

He postulated the three corners of the triangle to be energy, protecting the climate, and nutrition.

Israeli scientists are working on energy crops that are not food crops and that can thrive on marginal land. While Israel still lacks the great swaths of land needed to grow energy crops, the technology will be marketed worldwide.

As a general theme, Sinn said he wanted to warn people to be wary of the instruments they used to meet their goals. While some of the tools might look good initially, they could have potentially serious consequences, like linking energy and nutrition again in a world with seven billion people.

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