It is hard to figure out the full cost of the government’s corn ethanol mania. Random observations during the holiday season suggest that they are still larger even than reported already. A full accounting, if it were possible, would sound a cautionary note as a new congress and a new administration consider how to stimulate new energy and E-Tech.
The most believable numbers suggest that the full production costs of corn ethanol use more oil-based energy then it replaces. These numbers are of course, in dispute as they include assumptions about fertilizer production and tractor driving and a twisted maze of hiddensubsidies. Holiday packing peanuts are part of the picture.
A notable facet of this century’s world economy has been the entry of the poorest of the poor into the world economy. We have seen this in reports of cell phones in rural India and cell-phone banking in Africa. Driven by Corn Ethanol, food costs around the world skyrocketed. Worried about feeding their families, third world famers retreated from market crops and returned to subsistence farming. As the first world economies stumble, and consumers reduce their purchases, the emerging economies, now cash poor, cannot buy. The world economy, like our crops, has been made more brittle and one-dimensional.
Some problems may be masked as political rather than non-economic costs. There were riots in Mexico, where staple tortillas were priced out of reach. The resulting growing desperation may have recruited more to the drug armies fighting it out with Federales and the police, so much reported this last year. If so, this problem may outlast the short-term corn prices.
Every year at Christmas, I receive boxes from my large family spread across the country. Many of these boxes are professionally packed by the package stores, placed in branded boxes, and packed in commodity supplies. For the last few years, these boxes have been filled with biodegradable packing peanuts, made from expanded corn starch. This year, every such box was filled with plastic peanuts. Corn Ethanol has apparently been a boon to the petrochemical plastic peanut industry, as it priced competitors out of the market.
Christmas is always a time in which the family purchases more pre-made food. Whether for a convenient meal for the family re-gathered or for a special side dish or desert to augment a holiday meal, or even for a quick meal grabbed to allow time for holiday errands, I have performed my annual longitudinal survey of the food containers in local use. For the last few years, these containers have been increasingly made of a corn starch-based polymer that degrades in a host compost pile. This year they were once again, as they were five years ago, plastic.
I hope we will learn from this that good intentions are not enough. I hope that we will learn from this that one-dimensional approaches to sustainability may be less sustainable than their predecessors.
I hope that as we re-make energy markets, we eschew the hubris of central planning.
I hope we have the self discipline to resist the easy answer. We need better markets, and less central planning. This is too important to make the same mistakes again.