Wednesday, January 9, 2008

Energy Policy is Everything Policy

Last week, Josh Fershee challenged the wisdom of the Renewable Fuel Standard (RFS) that Congress made part of the Energy Independence and Security Act of 2007 (EISA). The White House says the new law "represents a major step forward in expanding the production of renewable fuels, reducing our dependence on oil, and confronting global climate change." At the same time, "[i]t will increase our energy security, expand the production of renewable fuels, and make America stronger, safer, and cleaner for future generations." (the website of the American Coalition for Ethanol) touts ethanol as though it were magic juice that falls like rain from heaven. It "drives economic development, adds value to agriculture and moves our nation toward energy independence." But wait, there's more. Ethanol "cleans America's air and offers consumers a cost effective choice at the pump." That all sounds fabulous to me.

My concern is different from Josh's. He objects that the price of sustainable energy policy is hidden from consumers at the gas pump, and ultimately borne by taxpayers, who apparently are politically less fearsome than gas customers. I'm worried about the impact of sustainable energy policy on everything else.

Ethanol and other biofuels require corn and soybeans as Josh points out. Replacing our dependence on fossil fuel with a dependence on corn and soybeans has radical implications for national security, land use, agricultural, food and health policy, to name a few. Let's consider one slice of the pie. is following the progress of the 2007 Farm Bill through Congress. The shape of this bill will affect directly and indirectly agricultural product prices, which in turn affect food prices, food production and consumption patterns and ultimately how much we weigh. (Obesity already costs US taxpayers more than $117 billion annually). Farm bills over the last three decades have directed tens of billions of dollars to support commodity crops -- corn and soybeans. After more than thirty years of subsidy, it's no surprise that we are stuffing ourselves with an abundance of processed foods that feature the cheap starches, fats and sweeteners made from these crops. The RFS in the EISA will increase demand for commodity crops as inputs for "sustainable" fuels, driving up commodity crop production, just as Americans are waddling through a food market stuffed with high calorie, low nutrition (ok, delicious) cheap food. I'm wondering what effect biofuel-driven demand for commodity crops will have on the price of the foods Americans should be eating to minimize the looming and staggering health care costs of obesity and related diseases.

Ideally, we'd think about energy policy considering all the effects, from national security, the environment and tax equity all the way to our bathroom scales. The very interconnectedness of nearly everything makes this task impossible. We approach impossible problems by compartmentalizing (a skill lawyers teach and learn in law school). We define ourselves and our ambits of expertise to match up with the compartments we create -- tax, agriculture, energy, economy, politics and so on. We confront complexity. But we do so by artificial isolation. The content of our compartments spills over into the compartments of others despite our efforts. Energy policy is everything policy. We can sublimate complexity. But we cannot overcome it.

To concede the interconnectedness of our compartments is to embrace the limits of our compartmental expertise. And we hate that more than we hate broccoli.


Josh Fershee said...

Marie, I think you hit the nail on the head. The broad impact of energy-related issues, as you explained so well, is one of the reasons I believe research in the energy area is one of the most important issues facing legal, political, and economic scholars, among many, many others. (Note the shameless, less-than-subtle self-promotion here.)

Part of my problem with subsidies for ethanol is that there are already, directly and indirectly, numerous subsidies for corn. These subsidies have existed for years, in significant quantity, in various farm bills, and there is little indication they are going to go away. It is quite clear (at least to me) we are paying dearly for the corn subsidies with obesity. And we never saw it coming. I'd rather not see a repeat at the pump.

Following my reasoning in my prior post, I suppose I should be calling for a “fat tax” on sugary foods and drinks, as a group of doctors did in 2006. While I am not quite there, corn subsidies have numerous hidden costs, whether we are talking about corn for energy or food. I never would have imagined such a great plant could cause so much consternation.

Alison M. Kilmartin said...

Recently I have heard commentators say that some of the candidates in this year's Presidential race sound like Hoover in the 1920's when he promised "a chicken in every pot, and a car in every garage." A car in every garage!? Whoa, it sounds like food and gas (cars, mobility, prestige) have long been major issues that resonate with the American people.