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New Report Urges Western Governments to Reconsider Reliance on Biofuels

January 29, 2015

New Report Urges Western Governments to Reconsider Reliance on Biofuels

Western governments have made a wrong turn in energy policy by supporting the large-scale conversion of plants into fuel and should reconsider that strategy, according to a new report from a prominent environmental think tank.

Turning plant matter into liquid fuel or electricity is so inefficient that the approach is unlikely ever to supply a substantial fraction of global energy demand, the report found. It added that continuing to pursue this strategy — which has already led to billions of dollars of investment — is likely to use up vast tracts of fertile land that could be devoted to helping feed the world’s growing population.

Some types of biofuels do make environmental sense, the report found, particularly those made from wastes like sawdust, tree trimmings and cornstalks. But their potential is limited, and these fuels should probably be used in airplanes, for which there is no alternative power source that could reduce emissions.

“I would say that many of the claims for biofuels have been dramatically exaggerated,” said Andrew Steer, president of the World Resources Institute, a global research organization based in Washington that is publishing the report. “There are other, more effective routes to get to a low-carbon world.”

…click on the above link to read the rest of the article…

 

How increased inefficiency explains falling oil prices | Our Finite World

December 29, 2014

How increased inefficiency explains falling oil prices | Our Finite World.

Since about 2001, several sectors of the economy have become increasingly inefficient, in the sense that it takes more resources to produce a given output, such as 1000 barrels of oil. I believe that this growing inefficiency explains both slowing world economic growth and the sharp recent drop in prices of many commodities, including oil.

The mechanism at work is what I would call the crowding out effect. As more resources are required for the increasingly inefficient sectors of the economy, fewer resources are available to the rest of the economy. As a result, wages stagnate or decline. Central banks find it necessary lower interest rates, to keep the economy going.

Unfortunately, with stagnant or lower wages, consumers find that goods from the increasingly inefficiently sectors are increasingly unaffordable, especially if prices rise to cover the resource requirements of these inefficient sectors. For most periods in the past, commodities prices have stayed close to the cost of production (at least for the “marginal producer”). What we seem to be seeing recently is a drop in price to what consumers can afford for some of these increasingly unaffordable sectors. Unless this situation can be turned around quickly, the whole system risks collapse.

…click on the above link to read the rest of the article…

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