03/06/2011: "Renewable Fuel Harms Environment?"
By Todd Myers
Since 2005, Washington state has required that gas and diesel sold in the state contain a two percent mixture of biofuels in an effort to reduce carbon emissions and reduce foreign oil imports. This proposed legislation would increase those mandates and push the biofuel requirement from two percent up to five percent
While its advocates offer many reasons to support the legislation, from an environmental standpoint, this legislation is likely to be counterproductive, increasing harm to the environment, increasing carbon emissions and even increasing imports of oil from hostile regimes.
First, claims about the environmental benefits of biofuels have been exaggerated or discredited. Although there are competing studies, the City of Seattle officials are sufficiently concerned about the negative impacts of soy-based biodiesel that they stopped purchasing the fuel for city vehicles.1 Stanford University found that some biofuels actually increase air pollution.
Professor Mark Jacobson told NPR:
“What we found was that in certain parts of the country, in fact most of the country - like in Los Angeles, in the northeastern U.S., in parts of the Midwest - you get increases in ozone due to converting to ethanol. If you weighed the changes in ozone by the population distribution of the U.S., you get a net increase in the death rate and hospitalization rate due to ethanol.”2
Given the poor record of biofuels, the state should not count on the fuel to make a measurable, positive impact on air quality.
Second, biofuels are an extremely expensive way to reduce carbon emissions. Last year the Congressional Budget Office released an analysis of the cost of federal subsidies for biofuel and their impact on carbon emissions reduction. CBO analysts note that “The costs to taxpayers of using a biofuel to reduce gasoline consumption by one gallon are $1.78 for ethanol and $3.00 for cellulosic [wood-based] ethanol.”3 This translates to an extremely high cost to cut carbon emissions costs. The CBO goes on to note that this translates to “about $300 per metric ton of CO2e for biodiesel.” Compare that cost to about $20 per ton on the European Carbon Market. Boosting Washington’s biofuel mandate from 2 percent to 5 percent would increase expenditures on a strategy that wastes $280 of every $300 spent reducing carbon emissions.
Third, increasing the mandate actually increases the amount of carbon emissions when compared to imposing no biofuel mandate.
Cornell economist Dr. Harry de Gorter found that when mandates are combined with the federal subsidies, gas stations use the subsidies they receive to lower their prices in an effort to increase market share.4 Since every gallon of gas or diesel must include biofuels, increased sales also mean increased access to federal subsidies. The value of those subsidies are used to reduce the price per gallon of fuel, helping to keep demand steady and gas prices lower than they otherwise would be.
The result is that a mandate reduces the already limited environmental benefits of biofuels by increasing overall demand for gas and diesel. It also does little to limit the amount of fuel we purchase from hostile regimes like Venezuela, Russia and Iran.
Environmental benefits are not the only reason some advocates are proposing the new mandate. For those hoping to improve air quality and reduce carbon emissions, however, should think twice about this new mandate. It is more likely to make air quality problems worse than to make them better.
 Chris Grygiel, “City of Seattle halts biodiesel purchases, looks for greener fuel,” Seattle Post-Intelligencer, June 19, 2009, http://www.seattlepi.com/local/407384_fuel19.html (Accessed November 27, 2010)
 National Public Radio, “Study Says Ethanol Pollution Could Rival Gas,” April 18, 2007, http://www.npr.org/templates/story/story.php?storyId=9647424
 Ron Gecan, “Using Biofuel Tax Credits to Achieve Energy and Environmental Policy Goals,” Congressional Budget Office Director’s Blog, July 14, 2010, http://cboblog.cbo.gov/?p=1161
(Todd Myers is the Director, WPC's (Washington Policy Center) Center for the Environment)
, February 2011