Environmental economists say biofuel expansion will boost food costs

Rapid expansion of Canada’s biofuel sector can have a negative impact on the promotion to achieve net zero emissions, as studies show biofuel production. Direct lead Environmental economists say that in response to rising food prices

“The economics literature on ethanol and biofuel policies has a long-standing theme of competition from food supply.” Said Ross McKitrick, Professor of Economics Testimony of the Commons Commission on Natural Resources at the University of Guelph.

“The rise in corn prices in the second half of the last decade has been attributed to the expansion of the ethanol directive, especially in the United States, and we expect similar effects here in Canada.”

BiofuelIs usually produced from crops and basically comes in two main types: ethanol and biodiesel. Ethanol usually comes from corn and sugar cane, and biodiesel comes from canola, soybeans and palm.

“If you want to get more ingredients, you have to find a way to remove them from the food supply or somehow increase the production of ingredients,” says McKitrick, who conducted his own research. I did.n Canada’s costs and benefits Biofuel policy..

“It is these secondary costs that are actually summed up and impact people. They are disproportionately lower for low-income households, especially if they are raising both energy and food prices. . “

In a written submission to the Commission on June 21, McKitrick Fraser Institute, Said that not all environmental goals are “well worth the cost of achieving them.”

Minister of Natural Resources, Seams Olegan, at the World Hydrogen Technology Conference in Montreal on the same day Announcement The $ 1.5 billion investment in the Clean Fuels Fund seeks suggestions to help expand Canada’s ability to produce cleaner fuels while creating middle-class jobs.

“Clean fuels reduce emissions, create jobs, increase competitiveness and help meet climate goals,” Olegan said in a press release.

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Minister of Natural Resources Seams Olegan answers questions at the House of Commons in Ottawa on February 17, 2020. (Canadian Press / Adrian Wild)

The fund aims to build or extend existing clean fuel production facilities such as hydrogen, renewable diesel, synthetic fuels, renewable natural gas and sustainable aviation fuels.

It also aims to establish a biomass supply chain and develop codes and standards that provide new sources of income for raw materials such as canola for farmers, grain handlers, forest harvesters, sawmills and municipal waste services. ..

McKitrick warned against jumping into “ambitious greenhouse gas reduction targets,” but said that “even climate policy costs opportunity.”

“in principle, If the sector exists only for government support, it is a A net outflow of national wealth, “he said in his submission.

Macchitric is his the study In 2014 Douglas Old,Associate Professor, Faculty of Economics and Finance, University of Guelph, Between 2008 and 2012, he showed that “Canadians paid about $ 3 for every $ 1 of the environmental benefits achieved by biofuels.”

“In reaching this conclusion, we made the most favorable assumptions possible in the case of biofuels,” he said, and studies show that switching to corn ethanol does not necessarily mean greenhouse gas compared to using gasoline. It has been shown not to reduce greenhouse gas emissions.

In contrast, Malcolm West, CFO Greenfield GlobalA Canadian ethanol producer, he told the Commission that ethanol could even be a net-zero fuel with existing technology.

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On June 15, 2021, commuters supplied gas to a gas station at a gas station in Toronto. (The Canadian Press / Tijana Martin)

According to West, ethanol is cheaper than gasoline, and since 2001, cars have already used at least 15 percent of the ethanol mixture. For “flex-fuel” vehicles, levels in the range of 25% to 85% are available.

But Macchitric claims his claim the study Showed that the cost of mixing ethanol increased as the “carbon strength target decreased”.

“A 5% reduction in carbon strength from the current baseline will increase the price of gasoline by about 17%, a 10% reduction will increase 48%, and a 20% reduction will increase 156%,” he estimates. Said.

“Ethanol has less energy per liter than gasoline, so consumers need to fill their tanks more often to travel the same distance.”

In addition, McKitrick’s Research To Clean Fuel Standard (CFS)Is part of the government’s climate plan to reduce emissions, the Canadian economy costs $ 6 for every $ 1 of environmental benefits, and net costs could average $ 440 per employer. Showed that there is.

McKitrick said the CFS has been revised since its research release in September last year, but the cost of implementing a policy that requires “cleaner and overall less polluting fuel from fossil fuel suppliers”. Said it would be useful as an estimate.

“We also estimated that 30,000 jobs nationwide would be permanently lost and $ 22 billion of capital would be at risk of withdrawing from the domestic economy, even after considering job expansion in the biofuels sector,” he said. Said.

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