World Bank Biofuels Report Finally Released

Three weeks ago, the Guardian's Aditya Chakrabortty published "the biofuels report they didn't want you to read": the research paper from the World Bank's Don Mitchell saying that 75% of the rise in global food prices could be attributed to biofuels. He said at the time:

Prompted by the Guardian's report, the Bank may now push the report out - although it may not be in quite this form. We'd rather you saw the original, which is why we're publishing it today, here.

Well, the report is now out (PDF here), and if anything it's better and clearer than the version the Guardian got. Here's the controversial bit:

The combination of higher energy prices and related increases in fertilizer prices and transport costs, and dollar weakness caused food prices to rise by about 35-40 percentage points from January 2002 until June 2008. These factors explain 25-30 percent of the total price increase, and most of the remaining 70-75 percent increase in food commodities prices was due to biofuels and the related consequences of low grain stocks, large land use shifts, speculative activity and export bans.

And here's how the original report phrased things:

The decline of the dollar has contributed perhaps 20 percent to the rise in food prices. Thus, the combination of higher energy prices and related increases in fertilizer prices, and dollar weakness caused food prices to rise by about 35 percent from January 2002 until February 2008 and the remainder of the 140 percent actual increase was probably due to biofuels and the related consequences of low grain stocks, large land use shifts, speculative activity, and export bans.

I can't say that I see any evidence of censorship here. After all, like all World Bank working papers, it carries the standard disclaimer:

The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development / World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

According to Chakrabortty, World Bank president Bob Zoellick tried to suppress publication of the report - something which, if true, probably only served to draw further attention to it. In any case, it's now out, in its full technicolor 21-page glory, and people can make up their own minds as to how persuasive it is.

 

(HT: Jevons)

Comments

[SubsidyEye:]

Hi Felix. Thanks for that. This is, indeed, an important report. You might want to fix your first link ("the report is now out"), however.

2008 Jul 31 08:53 AM

[Calvin C.:]

Jeff Mackee said it best 2 months ago on Fast Money: "Ethanol is a scam"...

2008 Jul 31 12:07 PM

[Tom Caracciolo:]

Who cares about affect on food prices now that cellulosic ethanol is becoming available and can easily displace over 50% of the gasoline now being consumed?

2008 Jul 31 02:15 PM

[Quintus Arius:]

Corn/wheat-based ethanol is man-made insanity. It never was a good idea. Very counter-productive. More energy wasted than produced.

But don't count on US politicians, who are willing to starve people by buying votes, to reverse this huge error.

2008 Jul 31 03:58 PM

[SubsidyEye:]

Tom Caracciolo,

I assume that your rhetorical question is asked out of incomplete knowledge, rather than crass insensitivity to the plight of the world's poorest people, who can't just sit around and wait for a decade or more for better biofuel technologies to come along.

You say that "cellulosic ethanol is becoming available and can easily displace over 50% of the gasoline now consumed." What are your assumptions behind that number? There are demonstration-scale plants that are under contruction (most of which have received large grants and loan guarantees), which will start to produce small amounts in aggregate within a couple of years -- displacing more on the order of 0.5% of gasoline consumption than 50%. And even that production will be subsidized by the federal government at $1.01 per gallon.

But as long as current laws remain in place, the diversion of food and feed crops (chiefly corn starch and soybean oil) to biofuel production will continue to grow over the next seven to eight years or so, reaching a production level in the United States more than double the level in 2007.

In short, it is unlikely that cellulosic ethanol will ease pressure on food prices any time soon.

2008 Jul 31 04:49 PM

[NOWHEREMAN:]

Governments do not make mistakes.
Besides, cellulosic ethanol is just as corrosive. Ain't gonna fly.

Bio diesel which comes from garbage and can be transported via pipeline, stored in current tanks, is the route to go.

2008 Jul 31 05:02 PM