Wednesday, January 25, 2012

The Problem With Biodiesel

I have mentioned before on this blog that for the largest American culprit of the biofuels-oriented "food-fuel substitution" argument, corn ethanol, I don't think the argument is as watertight as I once did. However, one point I feel that I did not emphasize enough is that in many cases - most outside of the United States - there is a clear and observable food-fuel substitution going on. One of the most obvious culprits is biodiesel.

Over the weekend, Michael Pollan (of The Omivore's Dilemma fame) posted "The problem with ethanol." on his twitter account. I don't use twitter and don't know if anyone's replied to him, but regardless I feel I must point out the colossal error that Pollan commits: the SciAm pictures concern palm plantations and land expropriation for biofuels, but not for ethanol. Palm plantations produce palm oil, and palm oil for biofuels is, one way or another, turned into biodiesel, for which virtually the only export market is Europe. It's only one negative aspect of the knock-on effects of biodiesel standards in the EU - and digging deeper, there are many others as well.

Monday, January 9, 2012

The absurdity of trade retaliation

My posting has been light of late, mainly due to the holidays, but news in the new year has not stopped rolling in. As we ended the year, the US has been proceeding on its investigation of Chinese products, deciding whether or not to impose antidumping duties on, among other things, solar panels. You might argue that all an investigation has to do is read back issues of the New York Times and Wall Street Journal, but there are some rules that go with this.

Antidumping tariffs can be unilaterally imposed under WTO rules by the aggrieved country provided there is a formal investigation; however, there is no external monitoring of each country's process. While one can be reasonably certain that most antidumping duties have at least some justification behind them, more often than not they are the ammunition of tit-for-tat trade wars, since most products that receive some form of subsidy are not covered by these duties. In less democratic countries, the process is also likely to be less transparent and more politically motivated.

China has responded, predictably, by launching retaliatory proceedings on the US' main export to China: foodstuffs and agricultural feedstocks, like DDG (used to feed livestock).  However, I'd argue that Chinese trade retaliation of this type is not only petty and silly, but also actively harmful to Chinese goals.