Biofuels, like ethanol, have been been part of carbon reduction policies in a number of countries including Australia. Biofuels are usually subsidised relative to petrol and other oil-based transport fuels.
Biofuels are popular with some groups. Farmers love them – because they push up the price they receive for their crop. Biofuel producers love them. And some environmentalists seem to support them. However, for those who care about the environment, the Productivity Commission’s recent report on Carbon Emission Policies skewers the advocates of biofuels:
In summary, while the results for biofuels vary, and are particularly sensitive to assumptions about life-cycle emissions intensities, most biofuel policies are high-cost means of achieving abatement. The cost per tonne of abatement — as measured by the implicit abatement subsidy — was typically A$300–600/t CO2 and possibly as high as A$800/t CO2.
In other words, biofuels are a ridiculously expensive way to reduce carbon emissions. And as an aside, they also push up world prices for basic crops, harming many of the world’s poor who depend on these crops for their staple diet.
However, the Biofuel industry is not taking the conclusion lying down. The interview on today’s AM program on the ABC radio was a lesson in lobbying double-speak.
Oh I can’t see how the Productivity Commission has actually got to those figures. The reason being is that biofuels in Australia, they are not a subsidised industry. The industry pays their full excise and that’s granted back.
Ahh, so if I pay the tax and then the government gives it all back to me (but not to other fuels), then there is no subsidy! Maybe biofuel lobbyists should try the same logic next time they go shopping.
Security Guard: Excuse me sir, you haven’t paid for that item.
Biofuel lobbyist: Sorry but, yes I did. I left $20 on the counter.
Security Guard: But Sir, it isn’t there now.
Biofuel lobbyist: No, of course not. I took the $20 back and put it back in my pocket. But that doesn’t matter. I put the $20 on the counter so I paid for the item.
Security Guard: Could you accompany me to the local police station please.
(Guard and biofuel lobbyist exit, lobbyist protesting that this is an injustice and that, just because they took the money back, they still paid for the item).