More biofuel risks

Thanks to Paul Chesser for sending this along see "New Trend in Biofuels Has New Risks", NY Times, 5/21/08 As Paul asks, "When will it be time to give up?" While I have somewhat less fear of runaway weeds than runaway food prices, the potential magnitude of the problem described in the above article should not be minimized. Two points in particular bear repeating: 1) "The Global Invasive Species Program estimates that the damage from invasive species costs the world more than $1.4 trillion annually — five percent of the global economy." I'm sure that number is substantially overestimated...because that's what those types of organizations do with numbers in order to increase fund-raising (like the way the IPCC publishes phony estimates of global warming). That said (and unlike the IPCC) there is certainly some real and likely large number which represents the damage to the world economy from invasive species overtaking what would otherwise be productive land. 2) "The cost of controlling invasive species is immense and generally not paid by those who created the problem." Added with #1 above, we're faced with just another version of a massive subsidy to biofuel producers and large (though more concentrated) costs hitting nearby third parties. In other words, unless regulations force biofuel producers to remove runaway biofuel crops which escape from their land, that uncontrolled growth will have to be dealt with by nearby landowners and farmers, either damaging their finances or forcing them to raise prices on the other things they sell. And if they're competing with landowners who don't have that additional cost, they simply won't be able to match those lower prices and they'll go out of business. Depending on the location, you'd then see reduced supply of whatever that landowner or farmer is producing, causing higher prices. It's a different mechanism than corn ethanol to increase prices of our food, i.e. it messes with supply more than demand, but the effect may still arrive, if on a smaller scale. I'm not saying that this issue should rule out "second-generation ethanol" production. But if there's any place in the domestic economy that there is a proper role for government, it's in protecting property rights. I would hope and expect that regulations are put in place which require second-generation biofuel crop producers to be required to clean up and remove invasive species which escape their land and compensate landowners who suffer income loss or loss of value because of that escape. Just the financial risk of having to do such work will likely make biofuel crop producers much more careful than they otherwise would be, limiting the likelihood of having a problem in the first place. I've bashed ethanol severely and repeatedly, but it's not because I hate the idea of alternative energy. What I hate is massive distortions (and near-famine) caused by government subsidies and by government picking winners and losers instead of letting the free market -- by far the best way to sort out good products and services from bad -- do its necessary work.
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