ADI 08 Ethanol Aff

Spring

Ethanol Aff – Spring 1
Ethanol Aff – Spring 1...........................................................................................................................................1 1AC – Ethanol........................................................................................................................................................5 1AC - Ethanol.........................................................................................................................................................6 1AC – Ethanol .......................................................................................................................................................7 1AC – Food prices .................................................................................................................................................8 1AC – Food Prices..................................................................................................................................................9 1AC Food Prices...................................................................................................................................................10 1AC Food Prices...................................................................................................................................................11 1AC Environment ...............................................................................................................................................12 1AC Environment................................................................................................................................................13 1AC Environment................................................................................................................................................15 1AC Brazil............................................................................................................................................................16 1AC Brazil............................................................................................................................................................17 1AC Brazil............................................................................................................................................................18 1AC – Plan............................................................................................................................................................19 1AC Solvency........................................................................................................................................................20 1AC Solvency........................................................................................................................................................21 1AC Solvency........................................................................................................................................................22 Def of Biofuel Subsidies.......................................................................................................................................23 Def of Biofuel subsidies........................................................................................................................................24 Def of Biofuel Subsidies.......................................................................................................................................25 T- market price defs bad.....................................................................................................................................26 T- ethanol subs are agricultural .........................................................................................................................27 T- Tariffs are domestic subsidies.........................................................................................................................28 T- Biodiesel not agricultural................................................................................................................................29 AT We have to be Biodiesel.................................................................................................................................30 Corn Subsidies key...............................................................................................................................................31 CAFÉ exemption  Oil/CO2 emission............................................................................................................32 Eliminat VEETC saves $$...................................................................................................................................33 Small Producer credit doesn’t matter................................................................................................................34 Plan increases biofuel consumption and efficiency...........................................................................................35 1

ADI 08 Ethanol Aff

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Shift Solvency.......................................................................................................................................................36 Subsidies Key........................................................................................................................................................37 Subsidies key........................................................................................................................................................38 Subsidies Key........................................................................................................................................................39 Subsidies key........................................................................................................................................................40 Corn Subsidies = nearly all.................................................................................................................................41 Modelling..............................................................................................................................................................42 Brazil Shift............................................................................................................................................................43 Brazil Shift............................................................................................................................................................44 Lift Tarriff Key ....................................................................................................................................................45 Brazil Ethanol Solves...........................................................................................................................................46 Brazil solves food prices......................................................................................................................................47 Brazil Solves Food Prices....................................................................................................................................48 Brazil Relations....................................................................................................................................................49 Brazil Relations....................................................................................................................................................50 Brazil has capacity...............................................................................................................................................51 AT Brazil Defo......................................................................................................................................................52 AT Brazil Defo......................................................................................................................................................53 AT Brazil Defo......................................................................................................................................................54 Corn Collapse inevit/”Bubble”...........................................................................................................................55 Corn Collapse Inevit............................................................................................................................................56 Corn Collapse Inevit............................................................................................................................................57 Plan solves investment bubble............................................................................................................................58 Plan solve invest bubble......................................................................................................................................59 Price Stability.......................................................................................................................................................60 Recession collapses ethanol industry..................................................................................................................61 Food prices hurt ethanol industry......................................................................................................................62 Cellulosic Shift......................................................................................................................................................63 Food prices Internal Link - Generic...................................................................................................................64 Food prices Internal Link - Generic...................................................................................................................65 Food Prices Internal Link – generic ..................................................................................................................66 Food Prices Internal Link – generic ..................................................................................................................67 Food Prices – Developing world ........................................................................................................................68 2

ADI 08 Ethanol Aff

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Food Prices Developing World...........................................................................................................................69 Food Prices – Developing World........................................................................................................................70 Food Prices – Starvation ....................................................................................................................................72 Food Prices – Volatility .......................................................................................................................................73 Food Prices – Crop Diversion.............................................................................................................................74 Food Prices – Arable Land..................................................................................................................................75 Food Prices – Other commodities.......................................................................................................................76 Food prices – Riots ..............................................................................................................................................77 Corn usage hurts staple crops.............................................................................................................................78 AT Alt Cause  High Food Prices.....................................................................................................................79 Environment – Generic ......................................................................................................................................80 Environment – Dead Zone..................................................................................................................................81 Environment – Dead Zone..................................................................................................................................82 Dead Zone Impacts..............................................................................................................................................83 Environment – Fertilizers...................................................................................................................................84 Environment – Monocultures.............................................................................................................................85 Environment – Soil Erosion................................................................................................................................86 Environment – Soil Pollution..............................................................................................................................87 Ethanol  Species loss........................................................................................................................................88 Ethanol  pesticides...........................................................................................................................................89 Ethanol  water shortages.................................................................................................................................90 Ethanol  Water Shortages...............................................................................................................................91 Corn Ethanol  Deforestation...........................................................................................................................92 AT Ethanol Solves warming................................................................................................................................93 Ethanol subs  Increase gas consumption.......................................................................................................94 Ethanol subs  Increase gas consumption.......................................................................................................95 Corn Ethanol  Warming..................................................................................................................................96 Corn Ethanol  Warming..................................................................................................................................97 Corn Ethanol  Warming..................................................................................................................................98 AT: Use Corn Stalks Solves Env.........................................................................................................................99 Not enough land for corn ethano......................................................................................................................100 Biofuels distract from other Alt. Energy..........................................................................................................101 3

ADI 08 Ethanol Aff

Spring

Corn Ethanol energy inefficient.......................................................................................................................102 Corn Ethanol energy inefficient.......................................................................................................................103 Corn Ethanol energy inefficient.......................................................................................................................104 Corn Ethanol energy inefficient.......................................................................................................................105 Corn Ethanol energy inefficient.......................................................................................................................106 Biofuels don’t solve oil price variability. .........................................................................................................107 AT: Ethanol reduces oil dependency................................................................................................................108 Food Aid Add-on................................................................................................................................................109 Food Aid Add-on................................................................................................................................................110 Protectionism Add-on........................................................................................................................................111 Trade Add-on......................................................................................................................................................112 Budget deficit Add-on........................................................................................................................................113 Splash and Dash.................................................................................................................................................114 Splash and Dash.................................................................................................................................................115 AT: Can’t solve state policies.............................................................................................................................116 AT: Just remove tariff CP..................................................................................................................................117 AT: Just Remove Tariff CP...............................................................................................................................118 AT PICs of Tax credit or Mandates..................................................................................................................119 AT Reclassify Ethanol as industrial good CP..................................................................................................120 Cellulosic good...................................................................................................................................................121 Cellulosic Good...................................................................................................................................................122 AT: Butanol solves the aff.................................................................................................................................123

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ADI 08 Ethanol Aff

Spring

1AC – Ethanol
Observation One: The Status Quo. The Federal government provides massive subsidies to the ethanol industry at all levels of ethaol production and consumption. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

Government support is provided at all stages of production and consumption Support is often delivered through overlapping policies of federal, state and municipal jurisdictions. At the federal level, the largest contributor remains excise tax credits provided to biofuel blenders. Over the 2006–12 period, we estimate these credits will be worth $ 48 billion in subsidies to the ethanol sector, or nearly 60 percent of total support. The credits will provide nearly $ 5 billion in support to biodiesel, or roughly 45 percent of its total support. Market price
support measures how barriers to imports and domestic purchase mandates protect biofuel producers and enable them to earn more revenue than would otherwise be the case. Generally, it results from above-market prices paid by consumers. Market

price support is currently the second-largest element of support for ethanol. Transfers generated under the current 7.5 billion gallon per year federal mandate during the 2006–12 period were estimated to be roughly $ 17 billion. Crop subsidies provide lower-priced feedstocks to biofuel producers and remain an important form of support, especially in the ethanol sector. Although some types of crop payments have declined greatly due to higher market prices, direct payments are still expected to top $ 5 billion for the 2006– 12 period. The
decline in certain forms of support has been offset to some degree by a rising share of key crops (corn, soy, sorghum) that is being diverted to energy markets.

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ADI 08 Ethanol Aff

Spring

1AC - Ethanol
The subsidies for corn choose a market winner and vastly distort the market. The resulting overproduction makes a collapse of the corn ethanol industry inevitable without liberalization. Robbin S. Johnson former senior vice president of corporate affairs at Cargill Inc. and C. Ford Runge 2007 Distinguished McKnight University Professor of Applied Economics and Law and director of the Center for International Food and Agricultural Policy at the University of Minnesota. Ethanol:Train Wreck Ahead? Government policy is stoking unsustainable growth of the corn-based fuel. A more sober, diversified approach is needed. Issues in Science and Technology Fall http://www.issues.org/24.1/p_johnson.html If we are to avoid a situation in which ethanol becomes a demand diverter for corn, a fundamental reorientation in farm and energy policies is required. The alternative policy model will require replacing the mandates, subsidies, and tariffs designed to help an infant industry with a new set of policy instruments intended to broaden the portfolio of energy alternatives and to create market-driven growth in renewable energy demand. Today, politicians compete with one another to raise the biofuels mandate. Little apparent consideration is given to the potential consequences of building markets on political fiat rather than sound finances. The result is that capacity is built too fast, at uneconomic scale, and in the wrong locations. Competing interests such as domestic feeders and foreign consumers can get trampled in the process, especially during a short crop, when the mandate functions as an embargo on other uses. Eventually, competing suppliers take over the traditional markets imperiled by illconsidered mandates. As this scenario unfolds, the burden of false economics and competitive responses may become too much to bear, and the shaky superstructure will crash, stranding assets and bankrupting many. In order to avoid such a crash, the United States should not increase the biofuels mandate beyond the current level of 7.5 billion gallons. Next, consider subsidies to ethanol. The blender’s tax credit of 51 cents per gallon enabled ethanol to compete with gasoline in a market characterized by low gasoline prices and surplus corn supplies. That market no longer exists. Gasoline prices have skyrocketed because of high petroleum prices. The fixed per-gallon subsidy generated high profit margins for ethanol producers, which led to excessive growth in production. Some suggest correcting for this effect by replacing the fixed subsidy with
a variable one that would decline as oil prices rose. This approach essentially would link ethanol to the volatile petroleum market. Linking to the demand side of the equation, however, may not be the best avenue for reconciling food and fuel uses. We

should consider the subsidy’s effect on the supply side of the equation. To the extent that an ethanol subsidy reduces surpluses, it is likely to enjoy continued and significant political support. But if it creates shortages and diverts corn from food and feed to fuel uses, it will become increasingly controversial and politically vulnerable, as will the tariff walls erected to keep cheaper Brazilian ethanol out of the U.S. market.

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ADI 08 Ethanol Aff

Spring

1AC – Ethanol
Rapid overinvestment in Biofuels risks overproduction and a “bubble” burst making ethanol production an unsustainable option for alternative energy. Richard Conniff, 2007 2007 Guggenheim Fellow. Who's Fueling Whom? Why the biofuels movement could run out of gas * Smithsonian magazine, November 2007 http://www.smithsonianmag.com/sciencenature/presence-biofuel-200711.html?c=y&page=4
So what's the hitch? Partly it's that bit about doing a little planning. The

move to biofuels thus far looks more like a stampede than a considered program to wean ourselves from fossil fuels. Critics in the financial community have used words like "gold rush" and even the dreaded "bubble," fretting that "biofool" investors are putting too much money into new refineries, which could go bust as markets and subsidies shift or as technologies and feedstocks become obsolete. Betting the farm on biofuels has become commonplace: this year alone American farmers planted an additional 15 million acres in corn, and they were expecting one of the largest harvests in history. The share of the corn crop going into ethanol is also increasing pell-mell, from about 5 percent ten years ago to 20 percent in 2006, with the likelihood that it could go to 40 percent in the next few years. Not surprisingly, the price of corn doubled over the last two years. This past January, angry consumers took to the streets in Mexico City to protest the resulting surge in the price of tortillas, a staple food. In China, rising feed costs boosted pork prices 29 percent, prompting the government to back off its plan to produce more biofuels. Even titans of agribusiness worried out loud that we might be putting fuel for our cars ahead of food for our bellies. The
chief executive at Tyson Foods said the poultry producer was spending an extra $300 million on feed this year and warned of food-price shocks rippling through the market. Cargill's

chief predicted that reallocation of farmland due to biofuel incentives could combine with bad weather to cause food shortages around the world. Cattle ranchers and environmentalists, unlikely bedfellows, both called for rethinking those incentives.

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ADI 08 Ethanol Aff

Spring

1AC – Food prices
Advantage _____ : Food Prices The diversion of corn to ethanol disrupts food and commodities markets rapidly increasing the price of staple crops across the globe. RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota) The current biofuels craze is neither clean nor green. Instead, it has disrupted food and commodities markets and inflicted heavy penalties on poor consumers. These developments have occurred despite record global grain harvests in 2007. Our analysis (and virtually everyone else's), assumes that normal trends in grain yields will continue or improve. But U.S. corn yields, despite dramatic increases over the last half-century, have also shown significant departures from trend, including decreases of roughly 30 percent in some years due to adverse weather. Planting delays this spring in the Corn Belt due to wetter, cooler conditions are beginning to raise concerns about this year's crop. And, as reported recently in the Wall Street Journal, many economists "believe that food inflation will rise faster than the USDA estimate and likely continue into 2009." The policy response to these pressures, in both rich and poor countries, has not been encouraging. Rather than reducing the mandates, subsidies, and tariffs that buttress the ethanol industry, the U.S. government has larded new agricultural legislation in Congress with further subsidies and shifted blame to other countries (or to economists). The one token reduction came in the recent farm bill, which trimmed the ethanol subsidy from 51 to 45
cents per gallon--hardly a significant change.

Ethanol production also diverts other staple crops. Even marginal increases in the price of food puts 1.1 billion people at risk. Robbin S. Johnson former senior vice president of corporate affairs at Cargill Inc. and C. Ford Runge 2007 Distinguished McKnight University Professor of Applied Economics and Law and director of the Center for International Food and Agricultural Policy at the University of Minnesota. Ethanol:Train Wreck Ahead? Government policy is stoking unsustainable growth of the corn-based fuel. A more sober, diversified approach is needed. Issues in Science and Technology Fall http://www.issues.org/24.1/p_johnson.html As biofuels increasingly impinge on the supply of corn, and as soybeans and other crops are sacrificed to grow still more corn, a food-versus-fuel debate has broken out. Critics note that domestic and international consumers of
livestock fed with grains face steadily rising prices. In July 2007, the Organization for Economic Cooperation and Development issued an outlook for 2007– 2016, saying that biofuels

had introduced global structural shifts in food markets that would raise food costs during the next 10 years. Especially for the 2.7 billion people in the world living on the equivalent of less than $2 per day and the 1.1 billion surviving on less than $1, even marginal increases in the cost of staple grains can be devastating. Put starkly: Filling the 25-gallon tank of a sport utility vehicle with pure ethanol would require more than 450 pounds of corn, enough calories to feed one poor person for a year.

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ADI 08 Ethanol Aff

Spring

1AC – Food Prices
Complacency in the face of famine is murder, there is more than enough food to feed every hungry person. Africa News, June 30 2007 “Africa: Food for 12 billion. So why did 854 million go without?” http://www.africa-interactive.net/index.php?PageID=5038 accessed July 2, 2007 SS
"As

you are suffering from over-consumption, I am suffering from under-consumption. We need to strike a balance," said Mary Wahu Kaara from the Kenya Debt Relief Network with reference to the North and the South. Her words were echoed by Hilkka Pietila, honorary president of the World Federation of United Nations Associations: "We are wasting food in the North. We are eating too much, burning grain as fuel, and growing grain to feed pigs to slaughter for ham." Their contributions were part of a heated debate
over the past two days about the eradication of hunger, this at the Civil Society Development Forum. The three-day meeting is being hosted by the Conference of Non-governmental Organisations in Consultative Relationship with the United Nations (CONGO) and the United Nations Millennium Campaign. It ends Saturday. Jean Ziegler, U.N. special rapporteur on the right to food, alerted the more than 500 delegates that while 854 million people went without food

in the world last year, enough food was produced to feed 12 billion people. "This is why a child that dies from famine is murder," Ziegler said.

The tightening of corn supply makes any disruption drive food prices into the stratosphere. Henry I. Miller, Colin A. and Carter 2008 professor of agricultural and resource economics at the University of California, Davis and , M.S., M.D., is a research fellow at the Hoover Institution January 2008 . THE ENVIRONMENT: Running on Empty Hoovier Digest http://www.hoover.org/publications/digest/13871832.html In the short and medium term, ethanol can do little to reduce the vast amount of oil that is imported, and the ethanol policy will have profound ripple effects on other commodity markets. Corn
farmers and ethanol refiners are ecstatic about the ethanol boom, of course, and are enjoying the windfall of artificially enhanced demand. But it is already proving to be an expensive and dangerous experiment for the rest of us. With

other countries joining the United States in ramping up biofuel production, mainly of ethanol, world food prices are skyrocketing. A 2005 law mandates production of 7.5 billion gallons by 2012, about 5 percent of the projected gasoline use at that time. These biofuel goals are propped up by a generous federal subsidy—via tax credits—of 51 cents a gallon for blending ethanol into gasoline, and a tariff of 54 cents a gallon on most imported ethanol, to keep out cheap imports from Brazil. Such subsidies ignore science and economics in favor of politics, and show disdain for free markets. Thus, it is no surprise that the price of corn has doubled in the past year—from $2 per bushel to $4. We are already seeing upward pressure on food prices: nationally, food prices were up 3.9 percent in April 2007, compared to a year earlier. An Iowa State University study estimates that food prices have already increased by $47 annually per capita, or $14 billion overall. Until the recent ethanol boom, more than 60 percent of the U.S. corn harvest was fed domestically to cattle, hogs, and chickens, or used in food or beverages. Thousands of food items contain corn or corn byproducts. A spokesman for one of California’s largest cattle ranches and feedlots noted that since the end of 2005, the company has experienced a 36 percent increase in the cost of feed, which translates to an additional expense of $101 per animal raised. Reflecting these trends, the National Cattlemen’s Beef Association has demanded an end to both
government subsidies for ethanol and the import tariff on foreign ethanol. The poultry industry is also squawking. The National Chicken Council demands remedies from senators who represent the big Southern poultry states, and the National Turkey Federation estimates that its feed costs have gone up nearly $600 million a year. These effects may only hint at things to come. Any

shock to corn yields, such as drought, unseasonably hot weather, pests, or disease, could send food prices during the next few years into the stratosphere. Even Gregory Page, the CEO of agribusiness giant Cargill, a major beneficiary of the ethanol boom, shares these fears: “We just have to
be sure that the more is- better mind-set [regarding ethanol] doesn’t get way out ahead of the capacity of the land to provide the fuel. . . . What we would like to see is some thoughtfulness about what we will do if we have a weather calamity.” Such

concerns are more than theoretical: in 1970, a widespread outbreak of a fungus called southern corn leaf blight destroyed 15 percent of the U.S. corn crop, and in 1988, drought reduced U.S. corn yields by almost 30 percent. 9

ADI 08 Ethanol Aff

Spring

1AC Food Prices
These high prices rapidly increase food insecurity. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Rising prices of maize—and potentially of cassava, which is also an ethanol feedstock— would be a concern for the world’s poor, most of whom are net food purchasers. Maize is the preferred staple food of more than 1.2 billion people in Latin America and Africa (Global Crop Diversity Trust 2006). Cassava provides one-third of the caloric needs in sub-Saharan Africa and is the primary staple for more than 200 million poor people. It is also a reserve when other crops fail. A study at the University of Minnesota estimated that, for every percentage increase in the real prices of staple foods, the number of foodinsecure people in the world would rise by more than 16 million (Runge and
Senauer 2007).

Foods security outweighs all other impacts – it makes every impact inevitable Trudell, J.D. Candidate 2006, 05 (Robert H., Fall, Food Security Emergencies And The Power Of Eminent Domain: A Domestic
Legal Tool To Treat A Global Problem, 33 Syracuse J. Int'l L. & Com. 277, Lexis)

Today, more than 842 million people - nearly three times the population of the United States - are chronically hungry. 43 "Chronic hunger is a profound, debilitating human experience that affects the ability of individuals to work productively, think clearly, and resist disease. It also has devastating consequences for society: it drains economies, destabilizes governments, and reaches across international boundaries." The enormous number of chronically hungry people
44

conjures up a critical question: how can we feed these people? While the rate of population growth has been leveling off in the developed, wealthy countries of the world, the populations of the poorest countries and regions of the world still grow at an alarming pace. 45 Population statisticians refer to this phenomenon as population momentum. 46 Of the seventeen countries whose women average six or more births in a lifetime, all but two are in Africa. 47 In
48

sub-Saharan Africa, millions are undernourished and millions more live on a dollar a day, making it the most povertystricken region in the world today. [*285] Chronic hunger and poverty are the rock-and-a-hard-place in between which the people of subSaharan Africa find themselves today. One tragedy endlessly feeds upon and exacerbates the other because a person needs money to buy food, but she (or he) cannot earn money when she is chronically hungry. 49 The

food security issues of this region are a global concern. Silvio Berlusconi, Prime Minister of Italy, and Chairperson of the 2002 World Food Summit in Rome said, "Together with terrorism, hunger is one of the greatest problems the international community is facing." Human security is a value which can be broadly defined as both the
50

"freedom from fear" and the "freedom from want." Until recently, security was largely a concern arising out of the conflict among states, i.e. state security, which can be summed up in the phrase "military preparedness." 52 Today, it is recognized that the achievement of freedom from want is as important a goal as the achievement of freedom from fear and countries must arm themselves against such fear by addressing food insecurity. 53 In an editorial in the Economist, Kofi Annan, Secretary General of the United Nations, wrote that today's threats to security - terrorism, food security and poverty - are all interrelated so that no one country can tackle them alone. 54 For example, keeping our food supply secure plays a direct role in achieving freedom from fear. The State Department has been studying the possibilities of food-borne bioterrorism, introducing the national security element to food security concerns. 55 Likewise, in December [*286] 2004, during his resignation announcement, Tommy Thompson, the former Secretary of the Health and Human Services Department, stated: "For the life of me, I cannot understand why the terrorists have not attacked our food supply, because it is so easy to do." 56 Yet it is a mistake to think of global security only in military terms.

51

Food security deserves its place in any long-term calculation regarding global security. Widespread chronic hunger causes widespread instability and debilitating poverty and decreases all of our safety, for example from the increased threat from global terrorism. Widespread instability is an unmistakable characteristic of life in sub-Saharan Africa. Food insecurity, therefore, causes global insecurity because widespread instability in places like sub-Saharan Africa threatens all of our safety. Food insecurity in the unstable regions of the world must be taken on now lest we find ourselves facing some far worse danger in the days to come.
57 58 59

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ADI 08 Ethanol Aff

Spring

1AC Food Prices
RELIANCE ON CORN ETHANOL IS DRIVING UP WORLD FOOD PRICES – THIS ENSURES A GLOBAL ECONOMIC MELTDOWN Elliot, 2008 (Larry, Journalist, “Soft Landings and Hard Realities: The IMF Thinks We Can Ride Out This Crisis, But There Could Be Far Worse News To Come”, Guardian Weekly, April 18, Lexis)
The first is that it is far too early to say that the worst is over. Henry Paulson, who does Summers's old job at the US treasury, said he expected to see some impact from lower interest rates and tax cuts by the third quarter of this year. But that depends on the US housing market stabilising, because until it does there is a real risk of a vicious circle of foreclosures, collapsing consumer confidence, rising unemployment, bigger losses for US banks, tighter credit conditions and a falling stock market. The IMF says that risks are still heavily weighted to the downside. It produced an alternative scenario in which there would be a further tightening of credit conditions, a far bigger drop in equity and property prices than it currently expects, a gloomier assessment of the prospects for long-term productivity growth in the US, and an unwillingness on the part of foreign investors to continue buying US assets. It already believes there is a 25% risk of a global recession; under this alternative scenario it says there would be a deeper and longer period of falling growth in the US, accompanied by an extended period of weakness in the eurozone and spillover effects on the rest of the global economy through weaker trade flows and tougher credit conditions. This scenario looks just as realistic as the fund's baseline soft-landing forecast. For one thing, there is a clear disjunction between the idea that this is the biggest financial shock since the Depression and the idea that there will be only a short-lived and relatively mild impact on growth. In addition, the soft-landing thesis conveniently ignores the other headwinds facing the global economy. These include rocketing commodity prices that are contributing to a sharp rise in imported inflation, severe downward pressure on the dollar that threatens to become a disorderly plunge, the still-sizeable global imbalances that have resulted in massive trade surpluses in Asia, and massive trade deficits in the US, which have been only slightly reduced by a cheaper greenback and weaker growth. That

list was supplemented last week by global hunger caused by rising food prices. The world has suddenly woken up to what should have been blindingly obvious: trying to solve the problem of climate change by using crops for biofuel was a short-term fix with potentially lethal result. If you encourage farmers to use land that would have produced food for fuel, the price of food will go up. Gordon Brown considers this to be a serious crisis and is right to call for a global response. Yet apart from the humanitarian need to help those going hungry, rising food prices make it harder to avoid recession in the West, since they stifle consumer confidence and make policy-makers warier about cutting interest rates. Economic downturn causes nuclear war Chris Lewis, environmental historian, University of Colorado-Boulder, 1998, The Coming Age of Scarcity, p. 56 Most critics would argue, probably correctly, that instead of allow-ing underdeveloped countries to withdraw from the global economy and undermine the economies of the developed world, the United States, Europe, Japan, and others will fight neocolonial wars to force these countries to remain within this collapsing global economy. These neocolonial wars will result in mass death, suffering, and even regional nuclear wars. If First World countries choose military confrontation and political repression to maintain the global economy, then we may see mass death and genocide on a global scale that will make the deaths of World War II pale in comparison. However, these neocolonial wars, fought to maintain the developed nations’ economic and political hegemony, will cause the final collapse of our global industrial civilization. These wars will so damage the complex economic and trading networks and squander material, biological, and energy resources that they will undermine the global economy and its ability to support the earth’s 6 to 8 billion people. This would be the worst-case scenario for the collapse of global civilization.

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ADI 08 Ethanol Aff

Spring

1AC Environment
Advantage____: The Environment Scenario One: Soil Erosion High prices mean that increasing farmers have no incentive to put land into the Conservation Reserve Program which is necessary to prevent soil erosion and protect fragile habitats. Richard Conniff, 2007 2007 Guggenheim Fellow. Who's Fueling Whom? Why the biofuels movement could run out of gas * Smithsonian magazine, November 2007 http://www.smithsonianmag.com/sciencenature/presence-biofuel-200711.html?c=y&page=4 One other problem with the rush to "greener" fuels is that, despite the biodiversity happy talk, wildlife is already prominent among biofuel victims. Last year, for instance, farmers were protecting about 36 million acres through the U.S. Department of Agriculture's Conservation Reserve Program (CRP), which works to restore degraded lands, reduce soil erosion and maintain wildlife habitat. CRP land is what biofuel proponents often have their eyes on when they talk about producing biofuels and biodiversity by growing switchgrass. But farmers look at the bottom line, sizing up the $21 per acre they net with the CRP payment (to take a representative example from southwest Minnesota) against the $174 they can now earn growing corn. And they have begun pulling land out of CRP and putting it back into production. Soil erosion threatens all life on the planet. Horne and McDermott 2001 (James E., PhD and Maura, The next green revolution, p 69) Topsoil is crucial to agriculture. This first step – creating an conserving healthy soil – is the foundation of sustainable agriculture. It is
closely linked to the next two steps – conserving water and protecting its quality, and managing organic wastes and farm chemical so they don’t pollute.

How well agriculture manages soil, water, and organic wastes will determine its future health.
Conserving healthy soil by guarding it against erosion or other forces that would degrade it is the most basic step. This step has as its corollary actively building soil health, because soil used for agricultural purposes thoday is not as healthy as it could be. It is both diverse and less active biologically.

Without healthy topsoil, the world cannot begin to feed its billions. Although American popular culture discourse in recent years has speculated on the fate of life on earth in the case of alien invasion, asteroid bombardment, or rampaging killer viruses, the slow loss of quality of soil is more a threat to life on the planet than any of these scenarios.

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ADI 08 Ethanol Aff

Spring

1AC Environment
Scenario Two: Dead Zones Increased corn production for ethanol increase fertilizer use that creates a dead zone in the gulf of Mexico. RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Ethanol Fuels the Food Crisis,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota)
Moreover,

the supposedly "green" virtues of biofuels are not quite what they seemed. In fact, biofuels pose major risks to the environment. In October 2007, the Nobel Prize winning chemist Paul Crutzen, who pioneered the atmospheric science of ozone depletion, co-authored an article demonstrating that the heavy application of nitrogen fertilizer on corn (for ethanol) and on European rapeseed (for vegetable-oil biodiesel) would produce such high levels of atmospheric nitrous oxide--which is 296 times more damaging as a greenhouse gas than carbon dioxide--that it would have a net negative effect on greenhouse gas emissions. In early 2008, two articles in Science showed that forests or grasslands converted for the production of biofuels will
immediately incur a "carbon debt," due to the release of carbon dioxide from biomass and soil. This long "payback" for biofuels is disappointing in light of the

The second Science study demonstrated that biofuel production often displaces crops, moving them to new areas where further land-use conversions are required. In the Corn Belt of the Midwest, biofuels helped to convert nearly 20 million acres from soybean production to corn production in 2007, pushing soybean prices higher while encouraging extensive applications of nitrogen and phosphorus fertilizers that run off into lakes and streams, enter the Mississippi River, and eventually reach the Gulf of Mexico where they have created an oxygen-starved "dead zone." The authors found that such land-use changes nearly double greenhouse emissions over 30 years, and increase greenhouse gases for 167 years.
urgency of global warming.

This runoff literally asphyxiates fish, rapidly destroying marine ecosystems.
Janet Raloff, senior editor of Science News June 5, 2004; Vol. 165, No. 23 , p. 360 Massive oxygen-starved zones are developing along the world's coasts http://www.sciencenews.org/articles/20040605/bob9.asp
Although the kilometers, a

precise timing and size of the Gulf's dead zone varies with the weather, in many years it encompasses 22,000 square parcel of underwater real estate roughly the size of New Jersey. Fish that can evacuate as oxygen drops do so—although abandoning their home habitat may render them vulnerable to predators. Crustaceans and other seafloor life that can't leave fast enough simply die. There's no mystery as to what triggers this annual hypoxic zone, as the oxygen-starved region is formally termed. Into the Gulf of Mexico, the Mississippi River deposits water that is heavily enriched with plant nutrients, principally nitrate. This pollutant fertilizes the abundant growth of tiny, floating algae. As blooms of the algae go through their natural life cycles and die, they fall to the bottom and create a feast for bacteria. Growing in unnatural abundance, the bacteria use up most of the oxygen from the bottom water. Dead zones tend to develop in quiet, deep water a few km offshore. Typically, they appear where a river spews rich plumes of nutrients
into water that's stratified because of either temperature or salinity differences between the bottom and the top of the water column. If the water doesn't mix, oxygen isn't replenished in the lower half. The good news is that the Gulf's dead zone disappears each winter, observes Fred Wulff of the University of Stockholm. In the eastern Baltic Sea, where he works, a permanent dead zone covers up to 100,000 square km. Nasty blooms of blue-green algae in the Baltic also lead to regular beach closures and fish kills. Caused almost exclusively by human activities, coastal dead zones are becoming

increasingly common and recurrent, observes Robert J. Diaz of the Virginia Institute of Marine Sciences in Gloucester Point. His group finds that the number of major dead zones has been roughly doubling every decade since the 1960s. On March
29, the United Nations Environment Program issued its first Global Environment Outlook Year Book, a volume highlighting issues requiring urgent attention. The report drew notice to the increase in major coastal dead zones. After examining unpublished data by Diaz' team, the U.N. body concluded that there are some 150 recurring and permanent dead zones in seas worldwide. Over the past century, "overfishing was the leading environmental issue affecting our seas," Diaz says. "In

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the new millennium, it's going to be oxygen." How low? Fully oxygenated waters contain as much as 10 parts per million of oxygen. Once oxygen falls to 5 ppm, fish and other aquatic animals have trouble breathing. Sharks begin vacating areas with 3 ppm of oxygen, while most other fish can hold out until about 2 ppm. Sediment dwellers that can't leave a hypoxic zone begin dying at around 1.5 ppm. In some dead zones, oxygen hovers at 0.5 ppm or lower for months. Marine ecologists have documented both large and small dead zones in U.S. coastal waters throughout the past decade. Diaz and his coworkers wanted to extend the findings worldwide. During the past several years, they scoured many years of marine-science reports for indications of large dead zones. Sixty-eight

large, persistent, and recurring dead zones spanning the world's seas were reported for the first time during the 1990s. Most, Diaz says, appear to be ecosystems that had at that time just reached their breaking point. The problem of dead zones is escalating rapidly and globally, he concludes. His team is now investigating whether recurring dead zones are mushrooming in size or impact. Making such assessments won't
be easy, he concedes, because even for the best-studied sites, the dead zones in the Gulf of Mexico and the Mid-Atlantic region's Chesapeake Bay, quantitative data remain meager. Nancy N. Rabalais, an aquatic ecologist with the Louisiana Universities Marine Consortium in Chauvin, has been trying to fill in some gaps. She's been mapping the Gulf of Mexico's dead zone for roughly 20 years. When spring rains scour farm fields as far upstream as Ohio, Minnesota, and Montana, spilling huge quantities of nitrogen into the Mississippi, it's only a matter of weeks before the oxygen concentrations in the Gulf begin to respond. "Once a decline starts, it goes from about 5 [ppm] to close to 0 in about 7 to 10 days," Rabalais says. Shrimp and bottom-dwelling fish tend to evacuate into a halo around the periphery of the hypoxic zone, she notes. This hasn't escaped the notice of fishing fleets, which sometimes fill their landing quotas of commercially valuable catch by trawling the edges of a dead zone. However, such fishing success can mask a pending catastrophe, Diaz warns. In Europe, he recalls, "fishermen were laughing at scientists in the mid-'70s," when the latter cautioned that hypoxia was threatening bottom-dwelling aquatic life in the eastern end of the North Sea separating Norway, Denmark, and Sweden. Harvests of Norwegian lobsters, for instance, remained robust through 1978. The next year, however, these shellfish and the area's many bottom-dwelling fish were gone. The earlier bumper crops had reflected landings of oxygen-stressed animals that had left their burrows and other familiar turf to breathe easier, Diaz explains. Fishing for indicators Although scientists haven't observed fish dying in the Gulf of Mexico, J. Kevin Craig of Duke University in Beaufort, N.C., may be seeing harbingers of an impending crisis in brown shrimp (Farfantepenaeus aztecus), the Gulf's highestvalued species. He has investigated two parameters of the animals' health: size and lipid content. Over the past 3 decades, the average size and therefore price of Gulf shrimp has been falling, Craig notes. His data also show that the concentration of lipids in a shrimp's body—representing the energy stores these animals carry—tends to be 20 to 25 percent lower in animals caught in low-oxygen areas than in those caught in fully oxygenated water. The combination of factors suggests that hypoxia slows the animals' growth, the aquatic ecologist says. By contrast, Craig's team found "no obvious negative effects of hypoxia on growth or lipid content of the Atlantic croaker [Micropogonias undulatus]." Although this bottom-dwelling finned fish, as shrimp do, migrates just beyond the dead zone when oxygen concentrations plummet, its lipid concentration doesn't suffer. Also, its average size hasn't diminished over the years during which the Gulf of Mexico dead zone has grown. In fact, Craig says, since the displaced fish normally hovers at the edge of hypoxic zones— where many other evacuees also hang out—croakers may actually benefit from the oxygen crisis. To a predatory croaker, he speculates, the edge of the dead zone is "like a smorgasbord." Denise Breitberg of the Smithsonian Environmental Research Center in Edgewater, Md., has witnessed a similar dichotomy of dead-zone winners and losers in the Chesapeake. Anchovies (Anchoa mitchilli), for instance, spawn in surface waters, releasing eggs that sink to the sediment. If the eggs land in a hypoxic area, they'll die. On the other hand, Breitberg has found that the Bay's gelatinous species—its comb jellies (Mnemiopsis leidyi) and stinging sea nettles (Chrysaora quinquecirrha)—are quite tolerant of hypoxia. "Both can survive for several days at 0.5 [ppm oxygen], a habitat from which finfish are excluded," she reports. Breitberg worries that a growing dead zone in the bay each summer is creating a habitat that favors jellyfish over the commercially valuable finfish, crabs, and oysters. Despite the nation's most aggressive state and local efforts to curtail nutrient releases into local waters, last year's dead zone in the Chesapeake was the largest ever measured. Gulf course Accounts describing occasional bouts of hypoxia in the Gulf of Mexico date back to 1884, when a Mobile, Ala., newspaper reported a "jubilee"—a prolonged, anomalous run of fish and crabs into the shallows at Mobile. According to Diaz, although the reporter recommended that local citizens avail themselves of

a nagging question today is how much reduction in nutrient inputs to the Gulf of Mexico must occur for its dead zone to shrink substantially. Over the past few years, Don Scavia of the National Ocean Service in Silver Spring, Md., has developed a computer model of the
this "gift from God," it and subsequent jubilees almost certainly stemmed from the runoff of plant nutrients from farms and towns, which led to marine organisms' fleeing a new dead zone. For U.S. ecologists,

annual Gulf dead zone. By correlating river inputs with the dead zones that Rabalais has mapped since 1985, Scavia's team calculated relationships between freshwater flow, the Mississippi's nitrate content, and the Gulf's oxygen concentrations. Then, the team ran the model backward, plugging in annual measurements for the past half-century of nitrate concentrations, the annual cycle of the Mississippi's flow, and weather data. The calculations indicate that dead zones didn't become large, annual phenomena until the mid-1970s, says Scavia, who is currently the director of the Michigan Sea Grant program in Ann Arbor. But now that it's perennial, the hypoxia phenomenon will be hard to vanquish, the model also indicates. By running the model forward in time, Scavia's

team analyzed how much farmers and other polluters in the Gulf watershed—an area covering 41 percent of the lower 48 states' area—would have to scale back their nitrogen releases to limit the zone to an annual average of just 5,000 square km., a target set by the federal government 3 years ago. The researchers' conclusion: a 40 to 45 percent annual cutback in the nutrient releases. That nitrogen reduction is daunting, says Robert W. Howarth of Cornell University. "Over the past 20 years, nitrogen pollution in coastal waters has increased pretty steadily, about 1 percent per year," he notes. A biogeochemist, Howarth chaired a National Academy of Sciences committee that studied nutrient pollution in coastal waters and 4 years ago issued a report finding that the problem, affecting almost all U.S. coastal waters to some degree, was so serious that urgent national action was imperative. To date, Howarth tells Science News, because the federal government currently seeks only voluntary controls on nutrient runoff, there hasn't been much action. In fact, budget cuts are reducing the already-scheduled monitoring. Murky future Instead of getting better, the Gulf's dead zone could quickly get a lot worse, says Scavia. "There comes a time when the fisheries collapse," he says. Not only will commercial harvests plummet, but fish and shrimp reproduction will also drop off. In some cases, a commercially popular fish might completely disappear. Unfortunately, he says, no one knows how close the Gulf is to that point. It might take a year, or it could take 2 decades. The problem, Scavia notes, is that once a hypoxia-fostered collapse starts, "it happens fast" and can be devilishly hard to reverse.

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1AC Environment
Scenario Three: Water The irrigation required by ethanol crops would place a strain on available water resources particularly in dry regions. Science Daily 2007. Increase in Ethanol Production from Corn could Significantly Harm Water Quality. http://www.sciencedaily.com/releases/2007/10/071010120538.htm In terms of water quantity, the committee found that agricultural shifts to growing corn and expanding biofuel crops into regions with little agriculture, especially dry areas, could change current irrigation practices and greatly increase pressure on water resources in many parts of the United States. The amount of rainfall and other hydroclimate conditions from region to region causes significant variations in the water requirement for the same crop, the report says. For example, in
the Northern and Southern Plains, corn generally uses more water than soybeans and cotton, while the reverse is true in the Pacific and mountain regions of the country. Water demands for drinking, industry, and such uses as hydropower, fish habitat, and recreation could compete with, and in some cases, constrain the use of water for biofuel crops in some regions. Consequently,

growing biofuel crops requiring additional irrigation in areas with limited water supplies is a major concern, the report says. Even though a large body of information exists for the nation's agricultural water requirements, fundamental knowledge gaps prevent making reliable assessments about the water impacts of future large scale production of feedstocks other than corn, such as switchgrass and native grasses. In addition, other aspects of crop production for biofuel may not be fully anticipated using the frameworks that exist for food crops. For example, biofuel crops could be irrigated with wastewater that is biologically and chemically unsuitable for use with food crops, or genetically
modified crops that are more water efficient could be developed.

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1AC Brazil
Tariffs on Brazilian sugar cane ethanol cause an overemphasis on corn ethanol. The plan solves by letting Brazilian ethanol compete in the US market. They have the capacity to supply the US with enough ethanol to solve. Dallas Morning News 6 May 2008 “Brazil Seeing Sweet Profit From Sugar Cane-Based Ethanol” Twenty thousand acres of sugar cane are sprouting through the red soil around this small town, destined for fuel tanks across the world. It's the start of a $2.7 billion ethanol project put together by Brazil Renewable Energy Co., or Brenco, a private venture financed by U.S. and Brazilian investors. They plan to export a billion gallons of ethanol a year by 2015 -enough fuel to offset demand for 65,000 barrels a day of oil. About 350 miles to the east, in fields surrounding the town of Flores de Goias, a firm
from Irving, TruEnergy Renewable Fuels, is putting together a $523 million ethanol project that could offset 8,700 barrels a day of oil demand. With world oil consumption running at 86 million barrels a day, the ethanol produced by these two private companies will amount to a modest alternative contribution. Global ethanol production, however, is already greater than the yearly increase in world oil demand. Without ethanol, high oil prices would be higher still. "Demand for oil is increasing every year, but reserves are more and more difficult to find," said Brenco founder Henri Philippe Reichstul, a former head of Brazil's

"We have an alternative that is also the fastest way of reducing your emissions from cars without changing anything," he said. "To me, it looks like a no-brainer." Still, others say ethanol advocates are driving drunk. Biofuels -- especially corn-based ethanol made in the United States -- are under attack for inflating food prices, destroying rain forests, depleting water supplies and increasing pollution. "We felt there was good reason to investigate this avenue for generating a sustainable fuel away from oil," said Ken Cook, president of the farm-oriented Environmental Working Group in Washington. But "we are replacing oil insecurity with food insecurity." Gov. Rick Perry and Sen. Kay Bailey Hutchison, R-Texas, have urged the Bush administration to ease up on ethanol mandates for gasoline because of rising food costs. Seventeen countries now require refiners to add ethanol to gasoline. Last year, Congress ordered the use of enough biofuels to equal 20 percent of U.S. transportation needs -- 35 billion gallons -- by 2022. One-fourth of the U.S. corn crop now goes to ethanol, and corn prices are so high that ethanol producers are struggling to make money as rising feedstock costs eat into profits. "The corn price spike has scared a lot of investors," said Paul Ho of Credit Suisse's Renewable Energy Group. Investors in Brazil are turning to sugar cane. Brenco and TruEnergy are planting in Brazilian cattle pastures and say they aren't crowding out grain producers. Best sugar cane
Petrobras oil company. The two companies' sugar cane plantations are more than 1,000 miles south of the Amazon forest, where high rainfall makes sugar cane an uneconomical crop. (Plant stress creates the sugar, so a period of drought

"Sugar cane doesn't have that." Ethanol from sugar cane could lower food prices, Mr. Lavender said. Federal Reserve Chairman Ben Bernanke says foreign ethanol can take the pressure off the U.S. corn crop and has recommended that Congress drop a 54-cents-a-gallon tariff on Brazilian ethanol. Brazil is expecting global demand for its ethanol to surge. Companies have announced plans for 75 ethanol plants. International investors are soon expected to account for more than 15 percent of Brazil's ethanol production. Starting in September, TruEnergy plans to build three ethanol plants in the Brazilian state of Goias. They will be fed by farmers promising to grow 148,000 acres of sugar cane. Mr.
makes for the best sugar cane.) "Ethanol in the U.S. has struggled a lot because the high price of corn creates a lot of food vs. fuel pressures," said Tim Lavender, president of TruEnergy. Lavender said he has lined up engineering and operations companies, a farmers' co-op and a prospective client -- the commodities trading arm of Gazprom, Russia's giant energy company. He still needs capital.

TruEnergy's principals have $4 million invested in the deal and hope to find Brazilian investors willing to put in $150 million, Mr. Lavender said. The total cost of the project is estimated at $523 million. Brenco partners Mr. Reichstul's partners include Sun Microsystems
founder Vinod Khosla, AOL founder Steve Case and California supermarket magnate Ronald Burkle, who has an investment partnership with Bill and Hillary Clinton. (Brenco says the Clintons are not direct investors in the company.) The Brenco investors have assembled $200 million for their project. They plan to cultivate 988,000 acres of sugar cane at three plantations, including one outside the town of Costa

Brenco and TruEnergy say they can generate all the electricity they will need by burning the sugar cane leaves and depleted stalks, with enough left over for a profitable side business selling power to Brazil's utilities. The international ethanol market is tiny compared with that for oil and gasoline. With pretty much only a domestic market, Brazilian producers typically depress ethanol prices whenever they bring a plant into operation, said Marcos Jank, president of the Brazil Sugar Cane Industry Association. Brazil produces 5.8 billion gallons a year of ethanol but exports a mere 960 million gallons. A university study done last year for the Ministry of Science and Technology found that Brazil would be capable of supplying the world with 52 billion gallons a year -- 1.4 million barrels a day -- if an additional $9.5 billion were invested
Rica. in pipelines, terminals and new plants. More than 100 countries could turn sugar cane into fuel for the international market, Mr. Jank said. About 20 nations dominate the often shaky international oil market.

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1AC Brazil
Brazilian Sugar cane ethanol is far superior to corn ethanol. It solves food prices, production costs, water, environment, and efficiency.
Eric Reguly, Special Business section reporter, “It's time to kill corn subsidies and go Brazilian” The Globe and Mail (Canada), May 12, 2008, Lexis
Your doctor will tell you not all cholesterol is created equal. The dangerous version can kill you, the good can make you healthier.

Brazil uses the same line with ethanol. The corn-based stuff pumped out by the Americans and Canadians is bad, bad, bad. But our sugarcane ethanol is cheap and plentiful and environmentally friendly. There is no doubt sugarcane ethanol is the more attractive fuel by almost every measure; just how much is still matter of political and
scientific debate. Which raises the question: If there is good ethanol and bad ethanol, why not take the good, ditch the bad and put the billions of savings to other uses? Forget it. The

United States and Canada use a wall of import duties and tariffs to repel Brazil's sugarcane ethanol, and protect corn ethanol. They do so in spite of the barrage of evidence that the latter is harmful to taxpayers and the environment and is pushing up food prices around the world.
In Canada, the House of Commons just approved a bill that will require gasoline to have 5-per-cent ethanol content by 2010. Europe is implementing aggressive biofuel content rules. The Americans treat corn ethanol as a birthright. The Brazilians are old ethanol pros. Sugarcane ethanol came to life in the 1970s, when the twin oil shocks made gasoline prices unaffordable. The government subsidized production and encouraged auto makers to engineer cars that could run on ethanol. The effort was pretty much a dud. The engine technology was abysmal and falling oil prices soon made gasoline attractive again. In the 1980s, Brazil killed the subsidies. But Brazil saw a long-term future in sugarcane ethanol, and it slowly came back to life. The fuel could create jobs in the deregulating agriculture industry, reduce the dependence on foreign oil and give motorists a choice at the pumps. Technological improvements would allow car engines to run on various ethanol-gasoline mixtures. At the time, sugarcane's relative environmental benefits were of no concern. The attraction was low cost

Sugarcane is everything corn is not. Corn is a food. Turning it into fuel raises food prices because of competition for arable land. In the United States alone, one-third of the corn crop goes to ethanol production. In the European Union, some 15 per cent of arable land will have to be devoted to biofuel production to meet content mandates. Yes, sugar is food. But it is not a staple. Sugarcane ethanol is inexpensive to produce. It requires no irrigation and only small amounts (relative to corn) of fertilizers and pesticides. It grows year round. The factories where sugarcane is turned into ethanol are clever little contraptions. The waste material is burned to produce steam, which spins a turbine to make electricity. About 3 per cent of Brazil's electricity comes from the ethanol factories. The figure is expected to rise to as much as 15 per cent by 2015. Where sugarcane shines is in efficiency. One hectare yields 7,500 litres of ethanol. One hectare of corn produces about 4,000 litres, according to the United States Department of Agriculture. The Brazilian sugarcane association, known as Unica, claims one unit of energy is required to produce nine units of sugarcane ethanol. The ratio for corn is far worse, at one to two. Did we mention Brazilian ethanol gets no subsidies? To be sure, sugarcane is not perfect. Since most of it is harvested by hand (mechanization is coming), the working conditions can
and high efficiency in a country too poor for high-tech alternatives to gasoline and diesel. be grim, and flash burning is often used to clear the foliage around the plants to make access easier. Burning creates carbon dioxide. While sugarcane is grown near Sao Paolo, well south of the Amazon rain forest, the argument can be made that the land devoted to sugarcane displaces other crops, resulting in deforestation elsewhere. Add up the pluses and the minuses and sugarcane ethanol blows corn ethanol off the farm. So why not import it? Because ethanol is all about transferring wealth to the American and Canadian corn industries. The subsidies are rich, the market is guaranteed through content goals. The American corn ethanol machine will tolerate no threats. The new U.S. Farm Bill proposes to extend the ethanol import tariffs - 54 cents (U.S.) a gallon - for another two years.

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1AC Brazil
Opening the market to Brazilian ethanol is key to US Brazil relations. Brazil Institute Special Report | April 2007 | Issue No. 3 The Global Dynamics of Biofuels Potential Supp ly and Demand for Ethanol and Biodiesel in the Coming Decade Woodrow Wilson Center for International Scholars Emerson Kloss, a diplomat at the trade policy sector desk for agricultural issues at the Embassy of Brazil in Washington, argued that the U.S.Brazilian partnership is one of many important joint ventures being pursued by the Brazilian government to expand the production and consumption of ethanol. Only with a truly international market for biofuels will Brazil and the United States have the structural market conditions necessary to develop and expand their own internal market and increase the participation of biofuels within their own energy matrix. Partnerships such as the U.S.-Brazilian one reflect the importance that Brazil places upon international cooperation on energy, as well as Brazil’s desire to bring alternative development to poor countries by creating an international market for biofuels
Numerous requests from developing nations hoping to cooperate in the field of ethanol have led to Brazil’s recent reassessment of the importance of energy, as seen in departmental and ministerial restructuring efforts to better coordinate energy issues among Brazilian agencies.

Current partnerships with countries in the Caribbean, Africa, and Asia seek to replicate Brazil’s positive experience with the production of ethanol. Brazil’s experience has provided a good source of income for rural populations and encouraged development in the country’s underdeveloped Northeast. Even more promising
in terms of development has been the production of biodiesels through palm oil and castor beans, although this industry is only in the initial phases and is thus relatively small in Brazil. The

joint U.S.-Brazilian strategy of energy cooperation is a key step in this

direction.

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1AC – Plan
The United States Federal Government will eliminate nearly all domestic agricultural subsidies for corn ethanol including but not limited to all tariffs on imported ethanol, the volumetric excise tax credits for blending ethanol, Renewable Fuel Credits and the Renewable Fuel Standard.

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1AC Solvency
The plan allows biofuels to compete on the open market increasing the efficiency of ethanol and eliminating incentives to overproduce corn. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

Biofuels should compete head-on with alternative ways to reduce oil demand in the transport sector
Given the inefficiencies that have been identified, combined with the rising environmental costs of biofuel production around the world, there is no reason that this one particular approach aimed at addressing energy security and climate change concerns should be given a free rein. Rather, it should compete directly for public support with alternative strategies, such as improving fleet efficiency, and encouraging hybrid and plug-in hybrid drive trains. While legislative efforts often contain public disbursements in all of these areas, there is no integration and no evaluation of the relative efficiency of the different policies in achieving the desired objectives. Policy

initiatives are adding additional layers of complication and distortion Congress appears convinced that the way forward is for them to continue to micro-manage the evolution of the market for transport fuels, with specific funding to specific fuels and technologies. There is an unwarranted confidence that they are somehow better placed to choose market winners, rather than focusing instead on establishing a level and transparent playing field on which all suitable strategies can compete. By forcing diversification of feedstocks away from corn, farmers and biofuel producers might be
compelled to use less economically worthwhile crops (with the consumer or taxpayer paying the additional cost via higher prices or additional cellulosic subsidies). The proposed Biofuel Energy Reserve, which sets up a series of payments to farmers for growing cellulosic crops, is one example. Initiatives allowing B20 vehicles to earn CAFE credits will likely compound existing perverse effects associated with Flex Fuel Vehicle exemptions from CAFE. Such exemptions are estimated to boost U.S. oil imports by 80,000 barrels per day. A pending trading system for these credits would enable manufacturers that have reached their allowed reduction in CAFE targets as a result of either FFV or pending B20 rules to sell the credits to other car firms. Implementation of such a

A wide array of possible formulations of the Renewable Fuel Standards—addressing targets; special credits for E85, cellulosic, or biomass-fired production facilities; and eligible fuels—all promise a range of unexpected and perverse outcomes that will yield few tangible benefits in terms of energy efficiency, diversification, or GHG mitigation. Yet, notably absent from the scores of legislative proposals are a simplification of the policy environment, increased competition amongst alternative solutions, and reliance of pricing mechanisms to target research and optimize production. There seems to be no political will to end the excise tax credits, despite their duplication with the RFS mandates. Efforts to reduce or end ethanol tariffs, even though this would also be a cost-effective way to diversify the country’s supply of alternative transport fuels, have failed repeatedly. Rising subsidies have an opportunity cost, not just a financial one The tens of billions of dollars spent on biofuels rearrange all sorts of economic relationships from land use, cropping patterns, and choice of outlet markets. Public funds spent inefficiently on biofuels are also unavailable to pursue more rapid and cost-efficient solutions to the real issues we face as a society. The U.S. farm system is already distorted, with wide-ranging subsidies to water use and crop production. The added layer of biofuel subsidies makes it quite likely that the country will squander truly valuable inputs, such as soil fertility and groundwater, to produce non-durable and rapidly consumed biofuels. There are already signs that this is happening, both in the United States and around the world. Restructuring U.S. policy would make a big difference in ameliorating this trend.
system would generate additional losses in the efficiency of the transport fleet.

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1AC Solvency
The plan would massively reduce costs of biofuels and eliminate market distortions. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Biofuel trade liberalization would increase competition, which should in turn help improve efficiency, bring down costs, and enable the world’s most efficient producers to expand their market share. Removal of high tariffs would bring down prices in highly protected markets, although world biofuel prices may rise. That said, removing border restrictions for biofuels while continuing the agricultural and biofuel policies that distort biofuel markets could prolong those distortions, as additional markets for subsidized agricultural outputs and biofuels would be created. The greatest welfare gains might be realized with the full range of trade reforms carried out simultaneously. Failing that, trade in ethanol and biodiesel might be liberalized as a first step. Such a move could also force governments to address openly the question (and the costs) of what objectives their biofuel support policies are actually pursuing. Masami Kojima and Todd Johnson October 2005 Energy Sector Management Assistance Programme (ESMAP) Potential for Biofuels for Transport in Developing Countries Because commercial feedstocks for biofuels are crops at present, large expansion of biofuel production could put upward pressure on food or animal feed prices. In a liberalized market, crop substitution should not normally lead to higher prices, since most foods and feeds are tradable and prices are set by world prices. In a liberalized regime, food or feed prices will rise in response to crop substitution only if the scale of substitution is so significant as to reduce the world supply of the substituted crop. With incomplete liberalization, however, where agricultural or other policy interventions continue to make it difficult for farmers or consumers to adjust, international prices will not necessarily play such a buffering role in the local economy (for example, where overvalued exchange rates and
foreign exchange shortages impede importation of additional food or animal feed). Any pass-through effects of the biofuel program upon these other segments of society should be captured in the economic analysis of the program.

Other countries will follow suit. Timothy Wirth July-August 2003 (“The Future of Energy Policy” – Foreign Affairs) p. LN Energy is a common thread weaving through the fabric of critical American interests and global challenges. U.S. strategic energy policy must take into account the three central concerns outlined above -- economic security, environmental protection, and poverty alleviation -- and set aggressive goals for overcoming them. Leadership from Washington is critical because the United States is so big, so economically powerful, and so vulnerable to oil shocks and terrorism. This is a time of opportunity, too -- a major technological revolution is beginning in energy, with great potential markets. And finally, the reality is that where the United States goes, others will likely follow. America's example for good or for ill sets the tempo and the direction of action far beyond its borders and far into the future.

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1AC Solvency
Removing subsidies is key to opening the domestic market to other countries and other types of ethanol. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

Import tariffs on ethanol constrain the gallons brought in from outside the country. Were the borders open, a larger quantity of less expensive foreign ethanol would enter the country, bringing U.S. ethanol prices down. Renewable Fuel Standards (RFS) constrain the ability to meet demand with other fuels, generating an artificial price premium on the blends allowed under the particular RFS statute. This premium will flow to domestic or foreign producers of eligible fuels. In practice today, the beneficiary of this policy is predominantly domestically produced corn-based ethanol. Market price support is a measure of how
much extra income U.S. ethanol producers receive as a result of market interventions that artificially raise domestic returns. Some of this return may come through higher market prices for their product. However, another

important source of subsidy is through the value of Renewable Fuel Credits (RFCs) they earn by making a particular fuel. Although it is government policies that create market price support, the actual financial flows usually involve a transfer from consumers to producers through higher prices. Elobeid and Tokgoz (2006) have estimated this value econometrically, updating their earlier work on the
subject. Were trade barriers to be removed alone (retaining the existing renewable fuel mandate of 7.5 billion gallons per year), they estimate the average U.S. ethanol prices from 2006–2015 would fall by 13.6 percent, or $ 0.27 per gallon.7 Applying

this to domestically-produced ethanol generates a subsidy of $ 1.3 billion in 2006, rising to more than $ 3 billion per year as domestic production grows. Should the import tariff remain in place while more stringent Renewable Fuel Standards are implemented (as are proposed in pending energy legislation), the MPS would be expected to rise significantly.8 Though importers also benefit from the higher-than-market prices, the tariff serves to direct most of the benefits to domestic producers. Foreign producers that do access the U.S. market (and its associated market price support) must first pay an “entry fee” in the form of the tariff. This reduces their effective MPS subsidy, though apparently not to zero. Official tariff rates on ethanol imports include a 2.5 percent ad valorem rate and an additional 54 cents per gallon secondary tariff on certain source countries (most notably Brazil). However,
data compiled by the U.S. International Trade Commission (USITC) indicate that actual duties collected on imported ethanol during 2006 and the first half of 2007 were much lower, averaging only 14 to 16 cents per gallon. This may be the result of drawbacks under existing law that allow tariff rebates if a duty-paid good, or a substitute good, is exported. In practice, a “person who manufactures or acquires gasoline with ethanol subject to the duty imposed...can export jet fuel (which does not involve the use of ethanol) and obtain a refund of the duty paid...” (Joint Committee on Taxation, 2 October 2007a: 48).

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Def of Biofuel Subsidies
Here’s what they are. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007
Support to production and consumption is provided at many points in the supply chain. For the purpose of this report, the dividing line between production and consumption is taken as the point at which the biofuel leaves the manufacturing plant. The one exception is volumetric (i.e., pergallon) subsidies provided to blenders, which are treated in this report as falling on the production side of the dividing line. At the beginning of the supply chain are

subsidies to what economists call “intermediate inputs”— goods and services that are consumed in the production process. The largest of these are subsidies to producers of feedstock crops used to make biofuels, particularly corn (for ethanol) and soybeans (for biodiesel). Although these subsidies do not result in a one-for-one reduction in the feedstock prices, and
therefore the input costs for biofuel manufacturers, they are believed to have some depressing effect on prices. Fabiosa et al. (2006), for example, estimate that full liberalization of agricultural markets with the removal of trade distortions would raise world (and therefore U.S.) prices of corn by 5.7 percent. Moreover, to the extent that production of the feedstock crops creates a demand for subsidies, the proportional share of the total subsidies to those crops used in the production of biofuels can be considered one element of the gross costs to government of promoting biofuels. (The net cost would take into account any increased taxes paid by farmers as a result of their increasing taxable incomes). Ducks Unlimited, for example, has pointed out that subsidies for crops—and the expansion of biofuels in particular—are contributing to the conversion of former grasslands to row crops and the loss of small wetlands in the Dakotas (Niskanen, 2006). Subsidies to intermediate inputs are complemented by subsidies to value-adding factors—capital

goods; labor employed directly in the production process; and land. In the case of biofuels, most of the federal subsidies supporting value-adding factors in the United States are linked to productive capital. These typically take the form of grants, or reduced-cost credit, for the building of biofuel manufacturing plants. Some localities are providing land for biofuel plants below market prices or for free; or exempting land from property taxes. Many others are paying, at the taxpayer’s expense, for upgrades to roads or rail lines servicing biofuel plants. These types of
subsidies lower both the fixed costs and the investor risks of new plants, improving the return on investment. Further

down the chain are subsidies directly linked to output. Output-linked support includes pergallon federal tax credits to both the biodiesel and ethanol sectors. These are nominally provided to fuel blenders, and they enable those blenders to pay a higher price for the biofuels they purchase than they could without the subsidy. Productionlinked subsidies are also common at the state level. Government policies that artificially elevate the price of biodiesel or ethanol are also relevant here.

Import tariffs that protect domestic producers from cheaper imports are one example, impeding the ability of foreign producers to capture domestic market share. Tariffs are particularly costly to consumers at points of the country that are far geographically from domestic biofuel production, but easily accessible to imports, most notably the east and west coasts. Subsidies are also being provided to help reduce the costs of building or refurbishing the storage tanks and infrastructure required for distributing biofuels, particularly E85 (a blend of 85 percent ethanol and 15 percent gasoline).
These help increase the availability of biofuels and reduce the total cost of supplying them to final consumers. Subsidies and government-procurement preferences for the purchase of vehicles that are intended to run on biofuels increase the potential size of the market for biofuels, albeit indirectly. Nonetheless, these policies are often drivers behind other policies to increase the production or availability of biofuels. For example, having purchased flex-fuel vehicles (vehicles capable of running on ethanol-gasoline blends containing up to 85 percent ethanol) in the past, many federal and state agencies are now requiring that these vehicles run on E85 whenever practical. Subsidies and regulatory requirements more directly affect the demand for biofuels. Subsidies

for consumption are minor, and have been provided mainly through government procurement programs that give preference to biofuels (such as that of the U.S. Navy for biodiesel) and assistance to school districts and municipalities that run vehicles (particularly buses) on biofuels. Of much greater influence have been so-called “renewable fuel standards,” which require that a specified percentage of biofuels be used in total transport fuels consumed. Such standards— particularly if they are mandated and not just indicative targets—set a floor for the amount of biofuels that will be sold, independent of price. These are expected to become an increasingly important source of subsidies in the future.

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Def of Biofuel subsidies
Subsidies for biofuel are not just cash payments, they include tax incentives, loan guarantees, mandates and tariffs. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)
A basic understanding of core issues regarding subsidy policy is helpful in interpreting this report. The following points provide a useful introduction to subsidy evaluation and address a number of areas of frequent confusion. Not

just cash. Government subsidies are often thought of as cash payments from a government to a private individual or firm. While cash grants are subsidies, there are many other more complex methods that governments use to transfer value to the private sector. These include reduced tax rates; government-provided loans or insurance at below-market rates; guarantees on private loans; special requirements or bans that affect either biofuels or their substitutes; and surcharges or tariffs on competing products. While the details of these approaches can, and do, vary widely, all are used to some degree to subsidize ethanol and biodiesel in the United States. Subsidies at every level of biofuel production and consumption. Daria Karetnikov, et al 2007 University of Maryland Graduate Program in Sustainable Development & Conservation Biology Problem Solving Fall 2007 How far can corn take us? Evaluating the impacts of ethanol Final Report The availability of subsidies and other supportive mechanisms from federal, state, and local governments is expansive. A broad mix of policy tools is utilized and includes grants, tax breaks, lending and credit enhancement programs, regulatory mandates, funding for research and development, and direct payments. Producers can tap into subsidies at almost every point of the ethanol production process, and often several sources of support are available for each level (Koplow 2007). Figure 7 illustrates the types of subsidies provided at various stages of the biofuel supply chain. The largest subsidies are provided to producers of feedstock crops, in most cases corn. Other subsidies lower the cost of building manufacturing plants by providing land for free or at a reduced cost, or by providing infrastructure support. Tax credits paid to blenders of gasoline and fuel support the actual output of the production process – ethanol, in this case. Price support for the ethanol product also comes in the form of tariffs. Finally, consumption of ethanol is buttressed by the renewable fuel standards and mandates for using ethanol-gasoline blends. The stage is set through market price supports that act to suppress the price of domestic ethanol. These come in the form of tariffs and consumption level requirements, guaranteeing a baseline market for the commodity. The current tariff is $0.54/gallon and is applied to most countries’ ethanol exports. Domestically produced ethanol is protected from foreign competition. The Federal Renewable Fuels Standards mandate that four billion gallons of renewable fuels is consumed by 2006, 7.5 billion by 2012, and potentially 36 billion by 2022, although only 15 billion gallons will come from corn (Goodell 2007).

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Def of Biofuel Subsidies
Two types of biofuel subsidies. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels The two most important liquid biofuels today are ethanol and biodiesel, and they are of primary interest for transportation. Support policies for these two biofuels fall into two general categories: (1) policies to replace consumption of petroleum fuels with such programs as mandated biofuel use and comparative reductions in fuel tax for biofuel; and (2) policies to stimulate biofuel production domestically through—for example— producer subsidies, import tariffs to protect local producers and direct government support for all biofuels to local production, and research to develop new or improved technologies. Some policies distort trade directly and are thus obvious subjects of this report.2 Other policies do not distort trade
directly but may affect it indirectly.

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T- market price defs bad
Shouldn’t use market prices to determine biofuel subsidy amounts. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Direct and indirect policy-induced price distortions greatly affect the financial attractiveness of ethanol and biodiesel production and trade. The resulting price distortions are large, and the forward and backward links with other pricedistorted markets are strong. This suggests that policy analysis should use economic values rather than relying only on financial or market prices, and that economic analysis needs to approximate general equilibrium considerations across multiple markets in which many related prices are distorted by domestic and foreign government policies. Financial price relationships for biofuels generally should be viewed with some skepticism, and, for policy purposes, attention should be paid to those economic values for which distortions have been accounted. ESMAP (2005) details a framework for economic analysis.

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T- ethanol subs are agricultural
The USDA regards subsidies to ethanol as agricultural. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels One question in the context of the Agreement on Agriculture is whether the current agricultural support for biofuels or their feedstocks belongs to the amber box or the green box. To be eligible for green box
payments, certain criteria must be met. Under all circumstances, subsidies must be publicly funded, not involve transfers from consumers, and not have the effect of providing price support to producers. In addition, the government support must meet specific policy criteria, the relevant one of which for biofuels is described in annex 2, paragraph 12, to the Agreement on Agriculture. That paragraph covers payments under environmental programs. Payments must be part of a clearly defined government environmental or conservation program and must fulfill specific conditions, including those related to production methods or inputs. Payments must be limited to the extra costs or loss of income arising from compliance with the program (WTO 2007). It seems difficult to regard subsidies given to promote biofuel production as offsetting the extra cost or loss of income involved in complying with an environmental program. For example, as described in appendix C, the

U.S. government does not consider that the Bioenergy Program of the Commodity Credit Corporation met any of the policy-specific criteria in the green box. Citing annex 3, paragraph 7, of the Agreement on Agriculture, which states that “measures directed at agricultural processors shall be included [in the Aggregate Measure of Support] to the extent that such measures benefit the producers of the basic agricultural products,” the USDA suggested that the Bioenergy Program could be viewed as an amber box subsidy (USDA 2006l). This statement also suggests that the USDA regards subsidies for ethanol production as agricultural subsidies.

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T- Tariffs are domestic subsidies
Import tariffs support domestic biofuel production. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Some support policies for biofuels do not in themselves distort trade, such as biofuel mandates (for example, mandatory blending) and fuel tax reductions that do not distinguish between domestic and imported biofuels. Other policies—such as import tariffs and producer subsidies—clearly protect or subsidize domestic production at the expense of foreign-produced biofuels. Tariffs are domestic support can’t separate the two. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Production and trade policies for biofuels and for agriculture cannot be easily separated. WTO
negotiations have taken a comprehensive view of what constitutes trade restrictions and offer a useful framework in which to consider trade policies. The

WTO defines trade liberalization to include reducing import tariffs, import quota restrictions, export subsidies, and, significantly, domestic support (subsidies). Subsidies are defined in the WTO Agreement on Subsidies and Countervailing Measures to include not only direct payments to producers, but also reductions in taxes and other charges that reduce government revenues otherwise due.

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ADI 08 Ethanol Aff

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T- Biodiesel not agricultural
It’s not topical to reduce biodiesel support because it is not classified as agricultural. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Fuel tax reductions are typically granted to domestic and imported biofuels alike, in order to comply with World Trade Organization (WTO) principles that prohibit adjusting internal taxes and other internal charges to afford protection to domestic products. In the case of ethanol, however, these tax reductions are often offset by nearly equivalent import tariffs to prevent foreign producers from sharing in the tax reductions provided to domestic consumers. Border protection through high tariffs and quota
restrictions is a fiscally inexpensive way of protecting domestic producers and is liberally used by governments. Ethanol enjoys much higher tariff rates than biodiesel. The European Union levies a specific import duty of €0.192 (US$0.26) per liter on undenatured ethanol and €0.102 (US$0.14) per liter on denatured ethanol; nevertheless, 101 developing countries enjoy duty-free access to the EU ethanol market. The United States levies a specific tariff of US$0.1427 per liter of ethanol in addition to a small ad valorem tariff. Some countries in the region enjoy various forms of duty-free access to the United States, and others take advantage of the “duty drawback” regulation. Australia has a specific import tariff of $A 0.38143 (US$0.31) per liter for both ethanol and biodiesel. Even Brazil levies a 20 percent ad valorem import tariff on ethanol, although it was lifted temporarily in February 2006 in the face of a looming ethanol shortage. Tariff rates on biodiesel in industrial countries are typically low (Australia and Canada being two exceptions). Ethanol

is classified as an agricultural good and biodiesel as industrial. Ethanol’s agricultural classification affords countries that impose high tariff rates on ethanol more time to liberalize ethanol trade, protecting domestic producers longer.

Ethanol is agricultural because it could be drank if you wanted. Biodiesel is not considered an agricultural product. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Agricultural goods tend to enjoy greater protection than industrial goods. Importantly, once a good is afforded protection, it is easier to prevent reform if the good is classified as an agricultural commodity and trade negotiations fall under the Agreement on Agriculture. Ethanol, but not biodiesel, falls under this agreement. Ethanol is included in the WCO’s HS chapter 22, and annex 1 to the Agreement on Agriculture
states that HS chapters 1 through 24 are covered by the agreement. Biodiesel, on the other hand, falls under chapter 38, which is excluded from consideration under the agreement. The

rationale for classifying ethanol under agriculture is that, undenatured, it can be

imbibed. Support given to biodiesel manufacture may fall under governments’ commitments under the Agreement on Agriculture if the subsidies can be shown to reach the farmer directly. One example is if the biodiesel manufacturer is required to offer a minimum guaranteed price to the farmer. Indirect benefits to agriculture as a result of increased demand for biodiesel—from such government interventions as biodiesel mandates or fuel excise tax exemptions—are not considered agricultural subsidies. Although ethanol is classified as an agricultural good, it remains to be seen how subsidies provided for ethanol production will be reported to the WTO (that is, as agricultural subsidies or nonagricultural
subsidies).

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ADI 08 Ethanol Aff

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AT We have to be Biodiesel
Biodiesel subsidies pale in comparison to corn ethanol subsidies. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

Biodiesel subsidies in the update are $ 520–640 million for 2006, rising to $ 1.9 billion by 2008 along with production. However, both the FAPRI and the EIA project flat or slightly negative growth in the next five to seven years as the biodiesel industry struggles financially. Under the current policy environment, biodiesel is expected remain a small player in the liquid biofuel sector. While subsidies for the 2006–12 period are still estimated at the quite sizable level of $ 9–11 billion, aggregate total support levels are a small portion of that flowing to ethanol.

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Corn Subsidies key
Direct Payments for corn support ethanol production. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

Rising prices for all crops, driven in part from high demand for corn use in the ethanol sector, has reduced federal payouts under counter-cyclical and loan-deficiency programs almost to zero. These types of programs aim to support farmer incomes when commodity prices are weak. However, direct payments (not linked to prices) continue to be paid to producers of program crops (including corn and soybeans), and the share of total harvests going into fuels has continued to grow. As a result, the pro-rata share of crop subsidies to biofuel producers have not fallen as steeply as might have been expected given surging crop prices. Ethanol’s pro-rata share of corn subsidies are an estimated $ 490 million for 2006, rising to nearly $ 775
million by 2012; the similar value for sorghum is roughly $ 15 million per year. Biodiesel’s pro-rata share of soy subsidies is slightly higher than $ 20 million per year.

Feedstock subsidies key to biofuel support. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Feedstocks typically account for more than half of the production costs of liquid biofuels. Despite remarkable reductions in production costs over the years in Brazil, the United States, and elsewhere, biofuels to date have been only marginally economic under favorable conditions (high world oil prices and low feedstock prices) and only in a handful of circumstances, as in Brazil in 2004 and 2005. More generally, biofuels have not been commercially viable without significant government support, even though the two leading biofuel markets are also two of the most efficient producers of biofuel feedstocks (net of subsidies, Brazil is the world’s lowest cost producer of sugarcane, and the United States is one of the lowest cost producers of maize). Consequently, all biofuel markets have been supported by government protection policies. Only about one-tenth of the biofuels produced and sold are internationally traded, and Brazil accounts for
about half of the exports. There is little trade of biodiesel, although it is growing.

Corn subsidies key. Daria Karetnikov, et al 2007 University of Maryland Graduate Program in Sustainable Development & Conservation Biology Problem Solving Fall 2007 How far can corn take us? Evaluating the impacts of ethanol Final Report Corn production is one of the heaviest subsidized activities in the country. The average annual payment during 2000-2004 to crop producers was $4.5 billion. This number more than doubled to $9.4 billion in 2005. Based on the share of total corn used for ethanol production, between $820 and $1.4 billion went to support this point of the ethanol supply chain. It should be noted that more than 80% of the corn subsidy is captured by 10 states that have the largest ethanol capacity (Koplow 2006).

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ADI 08 Ethanol Aff

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CAFÉ exemption  Oil/CO2 emission
Exemptions to CAFE for biofuel vehicles decrease the efficiency of the US fleet and contribute to a massive increase in oil consumption. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

Reductions in Corporate Average Fuel Economy (CAFE) requirements for firms selling Flexiblefuel Vehicles (FFV’s) also remain in place, whether or not the vehicles actually do use alternative fuel during operations. The resultant net reduction in the efficiency of the U.S. vehicle fleet has been estimated by the Union of Concerned Scientists to increase our oil imports by 80,000 barrels per day (roughly 1 billion gallons per year) (MacKenzie et al., 2005). Pending legislation, discussed in Chapter 5, could extend the CAFE
exemptions to a wide variety of biodiesel vehicles, worsening this problem.

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ADI 08 Ethanol Aff

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Eliminat VEETC saves $$
Billions in savings with the plan. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

The volumetric excise tax credits for blending biofuels remain the single largest implemented subsidy to both ethanol and biodiesel. Rates have remained the same over the past year, with every gallon of ethanol (including imports) receiving a
51 cents per gallon blender’s credit. For biodiesel, rates have remained at 50 cents per gallon for biodiesel from waste cooking oils and $ 1.00 per gallon for biodiesel made from virgin agricultural feedstock. No caps or linkage to oil prices have been instituted; as a result, the subsidy cost has risen linearly with domestic consumption. In

our October 2006 report, we noted the existence of a further tax loophole that enabled the excise tax credits to be excluded from taxable income (most tax credits are added to taxable income, reducing their cost to the Treasury). Sources within both the Joint Committee on Taxation of the U.S. Congress
(JCT) and the U.S. Department of Treasury (Treasury) have confirmed that there have been no technical corrections in how the excise tax credits are treated by the Internal Revenue Service (IRS). As a result, the credits are still excludible from taxable income. The incremental benefit of this exemption was $ 1.2 billion for ethanol in 2006 on top of a direct revenue loss of $ 2.8 billion; and $ 105 million for biodiesel, on top of $ 250 million direct revenue loss. The

incremental subsidy from this tax loophole, supposedly a policy accident, has become the third largest subsidy to ethanol and the second largest to biodiesel. By 2015, even if there is no increase in the RFSs, the VEETC will generate subsidies of $ 6.3 billion per year on a revenue loss basis and $ 8.9 billion per year on an outlay equivalent basis. The comparable figures for the VBETC on biodiesel are $ 470 million and $ 670
million per year. The low values for biodiesel result from quite negative predictions of how much the industry will grow over the next five to seven years. Also of interest is the fact that ethanol credits are earned on both the ethanol volume and the denaturants included in these blends to improve their usability. Currently, the U.S. JCT estimates that roughly $ 60–80 million per year in credits (already reflected in the above totals) are associated with the denaturants (Joint Committee on Taxation, 19 June 2007a: 2).

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ADI 08 Ethanol Aff

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Small Producer credit doesn’t matter
Most plants will be above the cutoff. There’s no impact to this credit. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

The small producer tax credit provides a 10-cents-per-gallon production tax credit, up to $ 1.5 million per year per plant, for any ethanol or biodiesel producer with less than 60 million gallons per year in capacity. Prior to the Energy Policy Act of 2005 (EPACT05), the production cut-off was only 30 million gallons per year, and less than 40 percent of the plants then producing were able to qualify based on size. In 2006, when the new limits took hold, the share of ethanol plants qualifying jumped to nearly 85 percent. This has been declining as newer plants entering the market tend to be larger than 60 million gallons per year. By the end of 2009, less than 60 percent of the plants will meet the 60 million gallons per year cut-off, based on construction trends. The PTC is capped at $ 1.5 million per plant per year. While this subsidy may have influenced plant sizing in the early days of the ethanol industry, most new ethanol facilities seem to be above the cut-off. The effects may be more relevant for biodiesel producers, where plant
sizes tend to be smaller. Industry-wide, maximum small-producer tax credits are estimated at $ 110 million per year, rising to roughly $ 170 million annually over the next couple of years. Actual

levels may be lower, depending on how joint ownership requirements are interpreted. The capacity limits on the credits disallow the subsidy if combined capacity for a single investor exceeds 60 million gallons per year. While each plant will be a separate corporation, it is likely that at least some of the majors would have these PTCs disallowed on the basis of cross-ownership patterns, reducing the national magnitude of the subsidy.

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ADI 08 Ethanol Aff

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Plan increases biofuel consumption and efficiency
Biofuel trade distortions decrease efficiency. The plan allows a free market that increase long term consumption and efficiency. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels If biofuels are not economic but some governments are prepared to offer considerable price subsidies, trade opportunities might arise for countries with duty-free access. Indeed, some countries in Eastern Europe and former Soviet Union republics are launching or planning to start biodiesel production with a view to exporting to the European Union. The financial viability of such trade obviously depends on political decisions in the countries providing large subsidies. The sustainability of such trade is uncertain. In general, lowering trade barriers increases global welfare in the long run. Biofuel trade is no exception. Reducing border barriers to biofuel trade would increase competition, which should in turn help improve efficiency, bring down costs, and enable the world’s most efficient producers to expand their market share. As the study on U.S.Brazil ethanol trade cited in chapter 3 shows, removal of high tariffs would bring down prices in highly protected markets and increase consumption.

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ADI 08 Ethanol Aff

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Shift Solvency
Favoring corn makes the makes the market less efficient. Daria Karetnikov, et al 2007 University of Maryland Graduate Program in Sustainable Development & Conservation Biology Problem Solving Fall 2007 How far can corn take us? Evaluating the impacts of ethanol Final Report To shift energy policy to sources that are truly sustainable and generate much more energy than is used in manufacturing the fuel requires an honest assessment of many fuel types and sources. Incentives
for using diverse renewable energy technologies such as wind and solar power need to be strengthened. As discussed above, cellulosic biofuels can also be part of the overall equation and their potential should be fully evaluated. One

of the major ways in which economic benefits can be preserved as ethanol production moves to take advantage of non-corn feedstocks is to shift farm policy. Instead of subsidizing the production of a certain commodity (in this case, corn), farm policy can be directed to support investments in biorefineries. By guaranteeing a certain return on an investment in an ethanol refinery, the government would release the farmer from her reliance on corn growing and allow the flexibility necessary to adjust to demand for new feedstocks. When the industry does shift to a more energetically efficient commodity, such as switchgrass, the corn farmer will be able to profitably switch alongside. Additionally, encouraging the marketing of all co-products can generate higher income for ethanol operations and eliminate some of the wastes created by the factory.

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ADI 08 Ethanol Aff

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Subsidies Key
Federal subsidies are the number one reason ethanol can compete in the market. Daria Karetnikov, et al 2007 University of Maryland Graduate Program in Sustainable Development & Conservation Biology Problem Solving Fall 2007 How far can corn take us? Evaluating the impacts of ethanol Final Report Whether or not ethanol is currently cost-competitive with gasoline is not a debate. It is widely agreed that under current technological processes and gasoline prices, ethanol production is not a costcompetitive alternative. Exactly how far ethanol falls short is not clear. One study cites that ethanol costs $0.50 more per gallon to produce
than petroleum (Saitone 2007). Another study phrases the discrepancy differently. It finds that while the production cost of ethanol was $0.46 per energy equivalent liter (EEL) of gasoline, the price of gasoline was $0.44 per EEL in 2005. Without even considering making a profit, ethanol’s production costs are greater than the entire price of gasoline (Hill 2006). This breakdown may shift as oil prices continue their ascent. The

industry freely acknowledges its reliance on the government support programs. Pacific Ethanol’s filed prospectus states that “the production of ethanol is made significantly more competitive by federal tax incentives.” The company further describes that the elimination of the largest programs, such as the Federal Excise Tax Credit and the Renewable Fuels Standards minimum level mandates, would have a grave material impact on the company’s operations (Pacific Ethanol, Inc 2006). VeraSun Energy Corporation, the
third largest producer of ethanol in the U.S. similarly acknowledged its dependency on subsidies. In its statement to the U.S. Securities and Exchange Commission the company wrote that the “U.S.

ethanol industry is highly dependent upon a myriad of federal and state legislation and regulation and any changes in legislation or regulation could materially and adversely affect our results of operations and financial position” (VeraSun 2006). ETHANOL ISN’T COMPETITIVE WITHOUT SUBSIDIES DUNN 07 (Ethanol Driving Up Corn Prices Eliminating tariff could provide relief, John Dale Dunn, M.D., J.D. is a member of the Science and Policy Advisory Board of the American Council on Science and Health and teaches emergency medicine at CR Darnall Army Medical Center, Published In: Environment & Climate News Publication Date: May 1, 2007 Publisher: The Heartland Institute) Jerry Taylor, a senior fellow at the Cato Institute, explained the economics of ethanol versus petroleum fuels at The Heartland Institute’s March 17 Energy Summit in Chicago. Taylor pointed out that without government subsidies and mandates, there would be no commercial market for ethanol because it would cost roughly $4 to $6 per gallon at the pump. “Ethanol subsidies are directly draining the wallets of American taxpayers,” Taylor said in an interview after the conference. “Not only that,” Taylor noted, “ethanol subsidies are raising prices for fuel consumers, raising prices for corn consumers, and causing a related rise in the price of numerous other food crops.” Jake Caldwell, director of policy for the Resources for Global Growth program at the left-leaning Center for American Progress, argued at the Summit that up-front subsidies are a necessary component of the government supporting a fragile ethanol economy until it can stand on its own merits in the free marketplace.

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Subsidies key
ETHANOL IS MORE COSTLY THAN GASOLINE AND WOULDN’T SURVIVE WITHOUT SUBSIDIES WILLIAMS 08 (“Archer Daniels Midland, Big Corn and The Ethanol Hoax,” Walter Williams, March 12, 2008, Walter E. Williams holds a bachelor's degree in economics from California State University (1965) and a master's degree (1967) and doctorate (1972) in economics from the University of California at Los Angeles.) Ethanol is 20 to 30 percent less efficient than gasoline, making it more expensive per highway mile. It takes 450 pounds of corn to produce the ethanol to fill one SUV tank. That's enough corn to feed one person for a year. Plus, it takes more than one gallon of fossil fuel -- oil and natural gas -- to produce one gallon of ethanol. After all, corn must be grown, fertilized, harvested and trucked to ethanol producers -- all of which are fuel-using activities. And, it takes 1,700 gallons of water to produce one gallon of ethanol. On top of all this, if our total annual corn output were put to ethanol production, it would reduce gasoline consumption by 10 or 12 percent. Ethanol is so costly that it wouldn't make it in a free market. That's why Congress has enacted major ethanol subsidies, about $1.05 to $1.38 a gallon, which is no less than a tax on consumers. In fact, there's a double tax -- one in the form of ethanol subsidies and another in the form of handouts to corn farmers to the tune of $9.5 billion in 2005 alone.

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Subsidies Key
THE US ETHANOL INDUSTRY IS EXPLODING IN SIZE AND RELIES ON SUBSIDIES RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota)
Now,

thanks to a combination of high oil prices and even more generous government subsidies, corn-based ethanol has become the rage. There were 110 ethanol refineries in operation in the United States at the end of 2006, according to the Renewable Fuels Association. Many were being expanded, and another 73 were under construction. When these projects are completed, by the end of 2008, the United States' ethanol production capacity will reach an estimated 11.4 billion gallons per year. In his latest State of the Union address, President George W. Bush called on the country to produce 35 billion gallons of renewable fuel a year by 2017, nearly five times the level currently mandated. The push for ethanol and other biofuels has spawned an industry that depends on billions of dollars of taxpayer subsidies, and not
only in the United States. In 2005, global ethanol production was 9.66 billion gallons, of which Brazil produced 45.2 percent (from sugar cane) and the United States 44.5 percent (from corn). Global production of biodiesel (most of it in Europe), made from oilseeds, was almost one billion gallons

ETHANOL IS LESS ECONOMICALLY COMPETITIVE THAN GASOLINE LIEBERMAN 08 (April 2, 2008, “Time for Second Thoughts on the Ethanol Mandate,” Ben Lieberman, Senior Policy Analyst for Energy and Environment in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, Heritage Foundation) The AAA calculates that ethanol has recently cost 20 to 30 cents per gallon more than regular gasoline.[1] And that does not take into account the heavy taxpayer subsidies, including a 51-cent-per-gallon tax credit, without which ethanol would be even costlier. Proponents insist that economies of scale will kick in and make ethanol more affordable as the mandated levels are ratcheted up, but there is no sign of that actually happening. The opposite is more likely. For example, ethanol costs more to transport than gasoline, and the expanding mandates necessitate usage well outside of its Midwestern home base. Ethanol is also more expensive to use in the summer: It contributes to smog and in several markets can be used only with a costlier base blend that compensates for this shortcoming; but this blend must be used year-round. Over the longer term, the law requires that corn alternatives like cellulosic ethanol be used as well.

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ADI 08 Ethanol Aff

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Subsidies key
WITHOUT THAT EXTRA 51 CENTS OUT OF AMERICAN TAXPAYER POCKETS, ETHANOL WOULD BE IMPOSSIBLE TO PRODUCE PROFITABLY. THE U.S. LACKS THE ETHANOL INFRASTRUCTURE TO MAKE IT WITHOUT SUBSIDIES. BRAZIL ONLY SUCCEEDED BECAUSE IT HAD THE SUPPORT OF DECADES’ WORTH OF SUBSIDIES TO STAND ON. Taylor 07 James M. Taylor, 1 May 2k7, The Heartland Institute. Environment & Climate News. “Brazilian Sugarcane Subsidies No Model for U.S. Policy.” Xavier notes corn-based ethanol is not capable of competing in the free market absent substantial federal subsidies. "American taxpayers today pay twice for ethanol," Xavier observes, "once in crop subsidies to corn farmers and again in a 51-cent subsidy for every gallon of ethanol. Without such a subsidy, ethanol simply would not be cost-competitive with gasoline." Xavier also notes ethanol may damage the
environment when produced on a large scale from low-yielding crops such as corn. Expanding corn acreage to meet artificially inflated ethanol demand will come at the expense of forests and prairies that are presently not cultivated, Xavier observes. Perhaps

most importantly, according to Xavier, Brazil's ethanol infrastructure model "did not arise from free-market competition: It required huge taxpayer subsidies over decades before it could become viable.

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ADI 08 Ethanol Aff

Spring

Corn Subsidies = nearly all
Federal subsidies will continue to overwhelmingly go to corn ethanol until at least the next election in 2012. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

Since the original report was published in October 2006, support for biofuels has continued to be provided at both the state and
federal levels. Most of the policies are linked to raw production or consumption levels and are not designed to phase out when oil prices (and biofuels are more competitive) are high, nor once specified production targets are met. As a result, the aggregate level of support has risen, though the subsidies per unit of energy output have remained fairly level. The

vast majority of government support goes to corn ethanol; this trend will continue under pending legislation, at least through to 2012. Despite rising awareness in the local and national media of some of the environmental and economic problems associated with the biofuel buildout, governments around the country continue to significantly expand public subsidization of the industry.
This is particularly evident with in respect of planned extensions of the volumetric excise tax credits (with few added controls), and the much higher mandated consumption targets under proposed updates to the Renewable Fuels Standard (RFS). Reaching the RFS, including in some of the pending legislative proposals, will cost more than $ 130 billion per year by 2025, according to estimates by the Energy Information Administration. Many of the policies currently in place do not appear co-ordinated or well targeted. Rather they are duplicative, with tax credits, grants, and feedstock support added to consumption mandates.

Subsidies for biofuels are overwhelmingly dominated by corn ethanol. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)
Assuming no change in the RFS, we estimate that total support for ethanol was

between $ 5.8 billion and $ 7.0 billion in 2006, and will rise sharply to $ 11 billion by 2008 and $ 14 billion by 2014 (see Table 4.1). Total undiscounted subsidies to ethanol from 2006–2012 are estimated at between $ 68 and $ 82 billion. Implementation of a higher RFS (e.g., 36 billion gallons by 2022) would increase total subsidies by tens of billions of dollars per year above these levels. These figures are higher than what we estimated last year. The increase is driven primarily by higher consumption of ethanol fuels than what we had previously estimated. Other changes included
lower pro-rata corn subsidies (due to declining counter-cyclical payments), the incorporation of estimates for tax-exempt solid waste bonds used by ethanol plants, and better characterization of market price support for imports. Market price support, related to the combination of high barriers to imports and domestic purchase mandates, comprises the second largest subsidy to ethanol, at $ 1.3 billion in 2006, rising to more than $ 3 billion per year by 2010. As noted earlier, it is likely to become the largest subsidy if modified to 35 or 60 billion gallon levels. For now, however, the largest element remains the VTEEC. Worth $ 3–4 billion in 2006, this program will subsidize the ethanol industry by $ 34 to $ 48 billion during the 2006–12 period. Feedstock support also remains important, despite falling countercyclical support, as direct payments remain high and ethanol is absorbing an ever-higher share of the total corn crop. State policies beyond reductions in motor fuel taxation were quantified only for 2006, based on last year’s analysis. Had these many state supports been catalogued and quantified, the magnitude of state and county supports would be much larger than what is shown in Table 4.1.

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ADI 08 Ethanol Aff

Spring

Modelling
THERE IS A WORLDWIDE TRANSITION TOWARD BIOFUELS RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota) The European Commission is using legislative measures and directives to promote biodiesel, produced mainly in Europe, made from rapeseeds and sunflower seeds. In 2005, the European Union produced 890 million gallons of biodiesel, over 80 percent of the world's total. The EU's Common Agricultural Policy also promotes the production of ethanol from a combination of sugar beets and wheat with direct and indirect subsidies. Brussels aims to have 5.75 percent of motor fuel consumed in the European Union come from biofuels by 2010 and 10 percent by 2020. Brazil, which currently produces approximately the same amount of ethanol as the United States, derives almost all of it from sugar cane. Like the United States, Brazil began its quest for alternative energy in the mid-1970s. The government has offered incentives, set technical standards, and invested in supporting technologies and market promotion. It has mandated that all diesel contain two percent biodiesel by 2008 and five percent biodiesel by 2013. It has also required that the auto industry produce engines that can use biofuels and has developed wide-ranging industrial and land-use strategies to promote them. Other countries are also jumping on the biofuel bandwagon. In Southeast Asia, vast areas of tropical forest are being cleared and burned to plant oil palms destined for conversion to biodiesel.

42

ADI 08 Ethanol Aff

Spring

Brazil Shift
Trade liberalization key to maintaining the success of the ethanol markets- Brazilian ethanol key to this. Elobedi and Tokgoz 06- (Amani Elobeid and Simla Tokgoz,October 06, “Removal of U.S. Ethanol Domestic and Trade Distortions: Impact on U.S. and Brazilian Ethanol Markets” Center for Agricultural and Rural Development Iowa State University) The effect of the removal of trade distortions extends beyond the ethanol market, affecting the corn market and its by-products, as well as the sugar market. The price of corn in the U.S. is impacted by the change in the demand for corn used in ethanol production. This affects the prices of other crops in the U.S. and
the area allocation between them. This has implications for the U.S. livestock sector because the prices of feed by-products from ethanol production change as well as the prices of other feeds such as the price of soy meal. Brazil

is a major player in the world ethanol market where both gasoline and sugar prices play an important role in determining what happens. The tariff rate in the U.S. is approximately 45 percent in ad valorem terms, which means that if it were eliminated, the U.S. market would become very attractive to Brazil. Under this scenario, with the increase in the world ethanol price, more sugarcane is diverted toward the production of ethanol and thus, the price of raw sugar rises. Ethanol and sugar in Brazil compete for sugarcane. Depending on the prices of ethanol and sugar, Brazil may end up increasing both the production of ethanol and sugar by expanding sugarcane area. Brazil can produce and export more ethanol than is projected in this study given stronger assumption on its ability to increase sugarcane production through acreage expansion, its potential to increase ethanol production capacity, and future investments in infrastructure. Ending the usage of corn-based ethanol and using Brazilian sugar cane-based ethanol would allow for a more efficient, affordable and environmentally safe biofuel to be used Financial Times in May 21, 2008 (“Poor Practices Taint Brazil’s ethanol industry,” London edition 1, from World News Section,
pg 10, d/l: from LexisNexis)
Brazil's long-standing biofuel programme, which dates back to the 1970s, is increasingly eyed with admiration and a dose of suspicion by the developed world. The Latin giant is the global leader in the area, with biofuels widely used in transport. The sales of popular flex-fuel vehicles, which can switch between petrol and ethanol, leapt to 72 per cent of total vehicle sales last year compared to a trifling 3 per cent in 2002. Brazil's

sugarcane based ethanol is cheaper and more energy-efficient than the corn-based version common in the US, where starch has to be converted to sugar before being distilled. The complexity of the process means corn-based ethanol produces only 10-20 per cent less carbon emissions than petrol. Sugarcane ethanol cuts emissions by 8796 per cent. Brazil's programme has reduced the country's dependence on petrol and cut emissions of CO significantly, according to Celso Amorim, Brazil's foreign minister. Brazil has one of the lowest rates of CO2 emissions per head in the world at 1.76 tonnes a year
2

versus the world average of 4.18 tonnes, he says. Nathaniel Jackson, senior investment officer at the Inter-American Development Bank in Washington, says the bank is supportive of the development of "smart" biofuels, such as Brazilian cane ethanol. "I wouldn't call corn-based ethanol a 'dumb' biofuel, but

reports show the conversion of corn into ethanol is having an effect on food prices." He sees a sea-change in support
for over the last year and points out that corporations such as Wal-Mart are embracing new initiatives: "We've reached a tipping point," he says.

43

ADI 08 Ethanol Aff

Spring

Brazil Shift
Brazillian Sugar Cane can compensate for US Ethanol The Dallas Morning News 08’ [http://www.redorbit.com/news/business/1372084/brazil_seeing_sweet_profit_from_sugar_canebased_ethanol/i ndex.html] "Ethanol in the U.S. has struggled a lot because the high price of corn creates a lot of food vs. fuel pressures," said Tim Lavender, president of TruEnergy. "Sugar cane doesn't have that." Ethanol from sugar cane could lower food prices, Mr. Lavender said. Federal Reserve Chairman Ben Bernanke says foreign ethanol can take the pressure off the U.S. corn crop and has recommended that Congress drop a 54-cents-a-gallon tariff on Brazilian ethanol. Brazil is expecting global demand for its ethanol to surge. Companies have announced plans for 75 ethanol plants. International investors are soon expected to account for more than 15 percent of Brazil's ethanol production. Starting in September, TruEnergy plans to build three ethanol plants in the Brazilian state of Goias. They will be fed by farmers promising to grow 148,000 acres of sugar cane. Brazil looking to supply the US with their more sustainable ethanol which trade barriers like subsidies are blocking. Orlando Sentinel 7/4- (Jerry W. Jackson, July 4, 2008, “Need cheaper fuel? Cane do, Brazil says,” Orlando Sentinel, http://www.orlandosentinel.com/business/orl-cane0408jul04,0,7545751.story)
With sky-high gas prices soaking motorists and wreaking havoc with the economy, Brazilian

sugar-cane growers are launching a multimillion-dollar radio and print campaign today in Orlando and elsewhere to promote their country's ethanol. The ads are aimed at generating support for a big cut in the U.S. tariff on imports of ethanol fuel produced from the giant South American nation's vast cane fields. The campaign comes just as Florida's largest cane
grower, U.S. Sugar Corp., is planning to shut down and get out of the business if the state's taxpayers are willing to shell out more than $1 billion for its land in the Everglades. U.S.

corn growers, meanwhile, are reaping record revenue trying to grow enough for food and for ethanol's growing use as a gasoline extender. They can't keep up, and recent Midwest flooding has killed entire cornfields, adding to the supply crunch. Representatives of Brazil's sugar-cane industry, in announcing the ad campaign this week, said the time is right because an increase in ethanol imports would help hold down soaring U.S. fuel costs by making the total U.S. supply stretch further. "Eliminating or even reducing the tariff on cane ethanol could provide immediate relief, particularly in California and Florida, where this form of fuel is already in use," said
Joel Velasco, the Washington, D.C.-based chief spokesman for the Brazilian Sugarcane Industry Association.

44

ADI 08 Ethanol Aff

Spring

Lift Tarriff Key
Removing tariff on ethanol imports would allow American consumers to have access to cheaper fuel
Jean Chemnick, July 7, 2008 ([Chemnick is a reporter for Politico], “Stopping Tariff on imports of Ethanol Would Aid US Market, Producers: Lugar,” Inside Energy, pg 10, d/l: LexisNexis)

A senior Republican senator says eliminating the tariff on ethanol imports while maintaining other government support for US ethanol production would give Americans access to relatively inexpensive foreign fuel while still encouraging the growth of the domestic biofuels industry. Senator Richard Lugar of
Indiana,
a strong advocate for the US ethanol industry, is virtually alone among farm-state lawmakers in calling for an end to the 54 cent/gallon tariff. Lugar told reporters

and other countries are in a better position to supply ethanol to America's coastal states than the US heartland can do, because there is not a pipeline infrastructure for ethanol.
outside an American Enterprise Institute conference last week that he believes Brazil

Tariff discourages Brazilian sugar ethanol. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Ethanol imports, including ethanol imported directly from Brazil, are taxed at a specific rate of US$0.1427 per liter and also carry an ad valorem import tariff of 2.5 percent for undenatured and 1.9 percent for denatured ethanol (20 percent for countries that do not have a most favored nation status, now called normal trade relations, with the United States). The specific tariff was instituted in the 1980s to prevent foreign producers from benefiting from the fuel excise tax incentive for ethanol. It was intended to be a temporary tariff, but it has been revised and extended several times. The current tax credit, which was scheduled to expire in September 2007, has been extended to January 2009. According to the U.S.
International Trade Commission, the total volume of undenatured and denatured ethanol imported into the United States surged from 0.8 billion liters in 2005 to 2.7 billion liters in 2006 (USITC 2007). In 2006, the United States bought 1.77 billion liters of ethanol directly from Brazil, or 52 percent of the record 3.4 billion liters of ethanol Brazil shipped out, according to the Brazilian agricultural ministry. The United States also bought 475 million liters of Brazilian ethanol via the Caribbean, accounting for another 14 percent of Brazilian exports (Dow Jones Commodities Service 2007c).

45

ADI 08 Ethanol Aff

Spring

Brazil Ethanol Solves
Brazilian ethanol industry continues to innovate and improve, further setting an example for the world, increasing supply, and avoiding the harms that corn ethanol has had on the US agricultural sector. Budny 07- (Daniel Budny, April 2007, "The Global Dynamics of Biofuels: Potential supply and demand for ethanol and biodiesel in the coming decade," Brazil Institute Special Report from the Woodrow Wilson Center for Scholars Issue No. 3, http://www.wilsoncenter.org/topics/pubs/Brazil_SR_e3.pdf) Brazil continues to invest in better technologies to improve efficiency and productivity of sugarcane ethanol. Technology is being developed to also use the bagasse and straw of sugarcane plants, and it is expected that hydrolysis of such cellulosic materials will drive future growth in ethanol production. Furthermore, the expansion of sugarcane cultivation in Brazil will have a negligible impact on the country’s agriculture, as compared with the expansion of corn production in the United States. Brazil currently grows sugarcane for ethanol on 7 million acres of land out of a total 790 million acres of arable land in the country. Increased sugarcane production will not crowd out other crops, such as soybeans, corn, or oranges, Jank insisted, but will most likely expand into lands currently used as pastures (of which there are currently 440 million acres, with many acres close to existing ethanol plants).

46

ADI 08 Ethanol Aff

Spring

Brazil solves food prices
Brazilian sugar cane-based ethanol does not influence food prices the same way, able to be a more effective source for alternative fuel Reuters on July 30, 2008 (“Biofuels major driver of food price rise - World Bank,” Reuters, d/l: http://www.waltainfo.com/walnew/index.php?option=com_content&task=view&id=1680&Itemid=48) Brazil's ethanol production did not push food prices appreciably higher because Brazilian sugar cane output has increased rapidly and sugar exports have nearly tripled since 2000, Mitchell said. The increase in cane production has been large enough to allow sugar output to rise from 17.1 million tons in 2000 to 32.1 million tons in 2007 and exports to increase from 7.7 million tons to 20.6 million tons.

47

ADI 08 Ethanol Aff

Spring

Brazil Solves Food Prices
Brazillian sugar cane ethanol solves environmental problems Washinton Post 07’ [http://www.washingtonpost.com/wpdyn/content/article/2007/03/23/AR2007032301625_pf.html] In Brazil, ethanol made from sugar cane produces about twice as much ethanol per acre as corn. Brazilian ethanol refineries get much of their power from burning cane residue, in effect recycling carbon from the atmosphere. The environmental benefit is large. Sugar-cane ethanol grown on established soils releases 80 percent less greenhouse gases than gasoline

48

ADI 08 Ethanol Aff

Spring

Brazil Relations
Eliminating the tariff on foreign ethanol would improve relations with Brazil
Jean Chemnick, July 7, 2008 ([Chemnick is a reporter for Politico], “Stopping Tariff on imports of Ethanol Would Aid US Market, Producers: Lugar,” Inside Energy, pg 10, d/l: LexisNexis) The US government also supports domestic ethanol production through a 51-cent credit available to blenders for each gallon of ethanol that they blend into gasoline. That credit, which once stood at 54 cents, is scheduled to decline to 45 cents next year, under a provision in a farm bill passed by Congress this spring. With the credit reduced, the tariff amounts to a trade barrier,

according to Lugar and other critics of the levy. Eliminating the tariff would improve trade relations with Brazil at the same time, Lugar said, which in turn would benefit American farmers and other businesses. US Brazilian relations are key to expanding the use of biofuels and energy cooperation. Budny 07- (Daniel Budny, April 2007, "The Global Dynamics of Biofuels: Potential supply and demand for ethanol and biodiesel in the coming decade," Brazil Institute Special Report from the Woodrow Wilson Center for Scholars Issue No. 3, http://www.wilsoncenter.org/topics/pubs/Brazil_SR_e3.pdf) Emerson Kloss, a diplomat at the trade policy sector desk for agricultural issues at the Embassy of Brazil in Washington, argued that the U.S.-Brazilian partnership is one of many important joint ventures being pursued by the Brazilian government to expand the production and consumption of ethanol. Only with a truly international market for biofuels will Brazil and the United States have the structural market conditions necessary to develop and expand their own internal market and increase the participation of biofuels within their own energy matrix. Partnerships such as the U.S.-Brazilian one reflect the importance that Brazil places upon international cooperation on energy, as well as Brazil’s desire to bring alternative development to poor countries by creating an international market for biofuels Numerous requests from developing nations hoping to cooperate in the field of ethanol have led to Brazil’s recent reassessment of the importance of energy, as seen in departmental and ministerial restructuring efforts to better coordinate energy issues among Brazilian agencies. Current partnerships with countries in the Caribbean, Africa, and Asia seek to replicate Brazil’s positive experience with the production of ethanol. Brazil’s experience has provided a
good source of income for rural populations and encouraged development in the country’s underdeveloped Northeast. Even more promising in terms of development has been the production of biodiesels through palm oil and castor beans, although this industry is only in the initial phases and is thus relatively small in Brazil. The

joint U.S.-Brazilian strategy of energy cooperation is a key step in this direction.

49

ADI 08 Ethanol Aff

Spring

Brazil Relations
US ethanol subsidies hurt the Brazilian ethanol industry, and threaten to destroy the cooperation between the two nations. Biofuels Digest 07-(Jim Lane, December 4, 2007 “Brazilian ethanol exports plummet 31 percent as US ethanol glut dampens trade,” Biofuels Digest, http://www.biofuelsdigest.com/blog2/2007/12/04/brazilian-ethanolexports-plummet-31-percent-as-us-ethanol-glut-dampens-trade/) In Brazil, ethanol exports fell to 60 million gallons in November, a drop of 31 percent from October and a fall off of 17 million gallons, or 22 percent, compared to November 2006. Excess US ethanol supplies were blamed for the drop. In addition
to falling export levels, prices also fell to $1.47 from $1.83 last year and $1.50 last month. Total export income from ethanol fell from $141 million to $86 million, a loss of $55 million or 39 percent. Overall, Brazilian ethanol exports for 2007 will be 800 million gallons, down

20 percent from

2006 owing to oversupply in the US market. Last month, consultant Jonathan Kingsman estimated a world surplus of ethanol at 658
million gallons, compared to a small shortage in 2006. He projected that, with the rise in ethanol feedstock prices, Brazil would find excellent export potential in Europe in 2008. “Demand

is disappointing for ethanol due to logistic problems, resistance, political issues,” he said. Brazil is expected to ask the World Trade Organization to investigate U.S. ethanol subsidies. If the WTO takes on the case, it will be the first time the organization has ruled on energy subsidies. Last month, Florida governor Charlie
Crist said that he opposed the Brazilian ethanol tariff and would lobby the state’s Congressional delegation to reduce it. The 54 cent per gallon tariff is scheduled to expire in 2009, and Crist warned that it was unlikely that the tariff would be repealed in 2008 due to the US Presidential elections. Recently, the

UN Dispatch reported comments by the head of the Global Bioenergy Partnership that trade in biofuels and biofuel feedstocks is too low. The report says that European and US subsidies for domestic production and tariffs for imported feedstocks and biofuels are reducing biofuel production in tropical and subtropical climates, where biomass productivity is significantly higher.

50

ADI 08 Ethanol Aff

Spring

Brazil has capacity
Brazil has the capacity, investment is increasing now. Brazil Institute Special Report | April 2007 | Issue No. 3 The Global Dynamics of Biofuels Potential Supp ly and Demand for Ethanol and Biodiesel in the Coming Decade Woodrow Wilson Center for International Scholars Brazilian entrepreneurs are investing large amounts into the sugarcane industry to increase productivity. Estimates place investments over the next six years at 14.6 billion dollars. No less than 77 new plants are currently being planned, while some of the 335 existing plants are scheduled for upgrades or expansions. The number of plants is estimated to reach 412 by 2012, increasingly with the help of foreign investors. Overall, however, the sugarcane industry is predominantly run by domestic companies. But by 2012 it is estimated that 16 plants will be foreign owned and operated, accounting for 6.5 percent of total sugar cane processing in the country (compared to approximately 4.5 percent today).

Brazil can handle supplying us with cane ethanol. They’ve already started. Jerry W. Jackson July 4, 2008 . “Need cheaper fuel? Cane do, Brazil says.” The Orlando Sentinel. http://www.orlandosentinel.com/business/orl-cane0408jul04,0,7545751.story
With sky-high gas prices soaking motorists and wreaking havoc with the economy, Brazilian

sugar-cane growers are launching a multimillion-dollar radio and print campaign today in Orlando and elsewhere to promote their country's ethanol. The ads are aimed at generating support for a big cut in the U.S. tariff on imports of ethanol fuel produced from the giant South
American nation's vast cane fields. The campaign comes just as Florida's largest cane grower, U.S. Sugar Corp., is planning to shut down and get out of the

U.S. corn growers, meanwhile, are reaping record revenue trying to grow enough for food and for ethanol's growing use as a gasoline extender. They can't keep up, and recent Midwest flooding has killed entire cornfields, adding to the supply crunch. Representatives of Brazil's sugar-cane industry, in announcing the ad campaign this week, said the time is right because an increase in ethanol imports would help hold down soaring U.S. fuel costs by making the total U.S. supply stretch further. "Eliminating or even reducing the tariff on cane ethanol could provide immediate relief, particularly in California and Florida, where this form of fuel is already in use," said Joel Velasco, the Washington, D.C.-based chief spokesman for the Brazilian Sugarcane Industry Association. The tariff on imported
business if the state's taxpayers are willing to shell out more than $1 billion for its land in the Everglades. ethanol, enacted in 1980 to help the fledgling U.S. ethanol industry develop, has been extended through the years. It's now 54 cents a gallon. U.S. ethanol backers say that importing more Brazilian ethanol would do little or nothing to reduce high gas prices. Moreover, eliminating the tariff would make the U.S. more reliant on a foreign fuel supplier -- the exact opposite of what the nation is trying to accomplish by weaning itself from imported oil, said Matt Hartwig, a spokesman for the

Most Brazilian motorists run their cars and trucks on ethanol made from domestic sugar cane, which produces more ethanol than corn does on a per-unit basis, reducing production costs. The United States does not grow enough sugar cane to divert much, if any, to ethanol; the recent decision by U.S. Sugar to sell its land to the state for Everglades restoration further reduces the chance that domestic cane would ever be a viable source of commercial fuel production. Even with the tariff, the U.S. imported 189 million gallons of ethanol directly from Brazil last year. Another 245 million gallons from Brazil was imported through Caribbean nations -- an approach that eliminates the tariff but adds to shipping, processing and handling costs.
Renewable Fuels Association. "We have already outsourced too much of this nation's future," Hartwig said.

51

ADI 08 Ethanol Aff

Spring

AT Brazil Defo
Brazilian sugar ethanol does not destroy the rain forest. Brazil Institute Special Report | April 2007 | Issue No. 3 The Global Dynamics of Biofuels Potential Supp ly and Demand for Ethanol and Biodiesel in the Coming Decade Woodrow Wilson Center for International Scholars Jank also dispelled fears that the expansion of sugarcane cultivation will encroach upon the Amazon rainforest. The Amazon region does not have the climate or soil conducive to growing sugarcane, nor does it have the technology or infrastructure in place to support cultivation and then ethanol production. Sugarcane and ethanol plants are predominantly located in the Centerwest and Northeast regions of the country. Furthermore, fears that increased sugarcane cultivation will displace soy or beef producers into the Amazon are likewise unfounded. The main concern over sugarcane expansion in Brazil is not land availability, negative environmental repercussions, or crop displacement, but logistics: Brazil lacks ample transportation and production infrastructure for a dramatic increase in sugarcane cultivation. Furthermore, Jank insists that expansion of the sugarcane crop will be based upon increased land productivity. Cattle Ranches, not corn farms, are responsible for encroachment on Amazon forest, new farms would replace degraded cattle ranches The Economist, June 28, 2008 (“Lean, Green and not Mean; Biofuels in Brazil,” The Economist, d/l: LexisNexis) For those worried about climate change, Brazilian ethanol is worth buying only if it is as green as it claims to be. It is certainly much greener than its corn-based rival in America: it packs 8.2 times as much energy as is used in its production, compared with just 1.5 times for corn ethanol, according to the Woodrow Wilson Centre, a Washington think-tank. Some greens say that the spread of sugar is deforesting the Amazon. That is not true. The vast majority of the sugar crop is grown thousands of miles away from the forest, in São Paulo state or the northeast. Some 65% of new planting of sugar cane has been on land that was previously pasture; the rest was previously used for other crops, according to Conab, a government agency. But might ethanol be indirectly responsible for lifting food prices and for pushing cattle ranchers into the Amazon? Such concerns look premature. Sugar cane occupies only 7m hectares (17m acres) of Brazil?s farmland (and only about half of the crop is distilled into ethanol). This compares with some 200m hectares devoted to cattle ranching, much of which is extensive (a Brazilian cow enjoys, on average, a lordly hectare of grazing). Sugar could expand on degraded pasture with little or no effect on beef prices. Besides, the ethanol industry may be poised for a leap in productivity. "The sugar-cane plant is now where corn was at the beginning of the
20th century," reckons Fernando Reinach, a biologist turned venture-capitalist at Votorantim, a conglomerate. His fund has backed two start-ups in Campinas in São Paulo state.

52

ADI 08 Ethanol Aff

Spring

AT Brazil Defo
Sugar ethanol expansion will not cause Amazon deforestation, nor will it displace other agricultural producers. Budny 07- (Daniel Budny, April 2007, "The Global Dynamics of Biofuels: Potential supply and demand for ethanol and biodiesel in the coming decade," Brazil Institute Special Report from the Woodrow Wilson Center for Scholars Issue No. 3, http://www.wilsoncenter.org/topics/pubs/Brazil_SR_e3.pdf) Jank also dispelled fears that the expansion of sugarcane cultivation will encroach upon the Amazon rainforest. The Amazon region does not have the climate or soil conducive to growing sugarcane, nor does it have the technology or infrastructure in place to support cultivation and then ethanol production. Sugarcane and ethanol plants are predominantly located in the Centerwest and Northeast regions of the country. Furthermore, fears that increased sugarcane cultivation will displace soy or beef producers into the Amazon are likewise unfounded. The main concern over sugarcane expansion in Brazil is not land availability, negative environmental repercussions, or crop displacement, but logistics: Brazil lacks ample transportation and
production infrastructure for a dramatic increase in sugarcane cultivation. Furthermore, Jank insists that expansion of the sugarcane crop will be based upon increased land productivity.

Brazilian ethanol expansion would not threaten the Amazon rainforest- the climate is not desirable for sugar growth. Oakland Tribune 07- (Alan Clendenning, July 10, 2007, “Brazil: Ethanol farming won't impact Amazon rain forest,” Oakland Tribune, http://findarticles.com/p/articles/mi_qn4176/is_20070710/ai_n19354074) Brazil's president said Monday that his nation's booming ethanol business won't hurt the Amazon rain forest, dismissing criticism that increased production of the alternate fuel could lead to deforestation. Silva, referring to concerns raised during his European visit last week, said it is unjustified to think that increased production of sugar cane for ethanol could prompt more jungle clearing. He said that Amazon weather conditions aren't favorable for the sugar cane used to produce ethanol and suggested critics are trying to prevent Brazil from advancing economically by taking advantage of rising demand for biofuels.

53

ADI 08 Ethanol Aff

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AT Brazil Defo
Growth of Brazilian sugar ethanol production and exportation will continue to expand- enough land and resource to continue. Elobedi and Tokgoz 06­ (Amani Elobeid and Simla Tokgoz,October 06, “Removal of U.S. Ethanol Domestic and Trade Distortions: Impact on U.S. and Brazilian Ethanol Markets” Center for Agricultural and Rural Development Iowa State University) In 2005, production of sugar and ethanol in Brazil totaled 28.2 million metric tons and 4.8 billion gallons, respectively, continuing a record trend for the past few years. The record production has resulted in the export of 18 million metric tons of sugar and 0.6 billion gallons of ethanol in 2005. Ethanol production is expected to increase by 48.5 percent while ethanol exports are expected to nearly double by 2015. If both sugar and ethanol prices remain competitive in the near future, Brazil is expected to continue to increase sugarcane production for both sugar and ethanol. The country has enough land to significantly increase sugarcane area harvested Brazil has enough land to grow for the world in response to high food prices, without having to intervene into the forest The Montreal Gazette, April 30, 2008 (“Amazon Squeezed By Shift in Food Prices; Brazil one of world’s bread baskets;
Rainforest Deforestation Accelerating as Farmers Cash in on Greater Profits,” from the Montreal Gazette, Pg A4, d/l: LexisNexis)

Brazil has become one of the worlds’ breadbaskets, a leading exporter of foods such as soybean and beef,
fueled by strong demand from Europe and developing giant China. The demand has helped feed the destruction of the world’s largest rainforest for cattle

With up to 50 million hectares in degraded farm land that could be reused – an area bigger than California – experts sat Brazil could raise its farm production without making further inroads into the forest. “We are trying to get farmers and producers to have access to new technologies so that they don’t have to advance into new areas,’
ranching and crop production. Environment Minister Marina Silva said when asked about Maggi’s comments.

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Corn Collapse inevit/”Bubble”
WITHOUT REFORM, THE ENTIRE BIOFUELS INDUSTRY WILL COLLAPSE FROM INCREASING FOOD PRICES AND GLOBAL WARMING NYT 08 (New York Times, “Rethinking Ethanol,” May 11, 2008)
Ending the tax subsidy should be easy. Ending the mandate will be tougher, though some members of Congress are showing buyer’s remorse.

One reason is the worldwide spike in food prices. That has been driven largely by a huge increase in demand and rising energy costs. The diversion of American corn from food to fuel — about one-fourth of the crop — has not helped. The other reason is a spate of studies suggesting that some biofuels — corn ethanol in particular — could accelerate global warming. Environmentalists had long regarded corn ethanol as at least carbon-neutral, emitting greenhouse gases when burned but absorbing those gases while growing. But rising demand for corn, for fuel and food, can have a profoundly negative effect if it causes farmers to clear previously untouched land, in turn releasing more carbon into the atmosphere. Congress’s guiding principle should be to tie federal help to environmental performance. The goal is not just to stop the headlong rush to corn ethanol but to use the system to bring to commercial scale promising second-generation biofuels — cellulosic ethanol derived from crop wastes, wood wastes, perennial grasses. These could provide environmental benefits and reduce dependence on oil without displacing food production. Though Congress is unlikely to undo the mandate, the administrator of the Environmental Protection Agency can. Unfortunately, President Bush is an ardent corn ethanol supporter, and Stephen Johnson, the E.P.A. administrator, is nothing if not a Bush loyalist. Without reform, rising food prices and increasing damage to the climate could provoke a reaction that could be the undoing of the entire biofuels industry. That would not be helpful to the industry or the planet.

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Corn Collapse Inevit
Rampant speculation puts the ethanol industry on extremely shaky footing. Nomi Prins June 19, 2008 June 20, 2008 by Mother Jones Who Benefits From High Food Prices? http://www.commondreams.org/archive/2008/06/20/9772/ Last week, new consumer price data released by the US Labor Department confirmed what most shoppers already suspected: Food prices, which took their
biggest one-month leap in nearly two decades in April, rose even further in May. Energy costs, too, went up last month. The big question, though, is why? Commodity analysts are quick to pinpoint reasons: Midwest flooding affecting food, livestock feed overdrive provoked by the Chinese, biofuel-related demand, and a weak dollar. These reasons all have some merit, but I'd argue it's speculation that's skyrocketed prices higher faster,

not supply vs. demand. At the financial leaders G8 summit that wrapped up over the weekend, food and oil speculation were front and center.And G8 leaders aren't the only ones expressing concern over traders profiting from the world's pain. Major hedge-fund stars like George Soros and Michael Masters are also screaming moral foul on commodity speculation—a clear signal there's more fire than smoke on the horizon. As Masters told a Senate committee last month, "Institutional investors have purchased over 2 billion bushels of corn futures in the last five years. [They] have stockpiled enough corn futures to potentially fuel the entire United States ethanol industry at full capacity for a year." Indeed, the current agricultural price

bubble has produced record highs in soybeans and wheat as well. Against this backdrop, a clueless Congress passed US
farmer and food-stamp aid within the recent farm bill, without addressing the possibility that speculation could be to blame, or that curtailing speculation could help alleviate the domestic and global food crisis. They should have looked toWall Street's lead. The latest grain and oilseed trading report from the Chicago Mercantile Exchange cited first quarter of 2008 trading volume up 32 percent over the last quarter of 2007. That's

extra money coming in from speculators, not corn or wheat farmers hedging their crop prices in case of bad weather.
Additionally, the hot new favorite among traders is betting on packages of energy and agricultural futures. Called CCO's (collateralized commodity obligations), they are like their subprime cousins, CDO's (collateralized debt obligations). Their performance is linked to rising commodity prices; the higher the prices, the more profit to the CCO. There's another group, besides the standard speculator crew, literally reaping

extreme profits from the price squeezes—the crop equivalents of Exxon, multinational agricultural biotechnology corporations. Monsanto, which recently told the 12th Annual Goldman Sachs Agricultural Biotech Forum that its profits would double by 2012, is buzzing (PDF); the firm's stock price doubled during the past year. ADM, the nation's second-largest ethanol producer, saw its annual revenues increase by 64 percent. Even agriculture conglomerate Cargill's third-quarter profits rose 86 percent. Last week, a group of senators
led by Carl Levin (D-Mich.) introduced the Close the London Loophole Act, which would curtail a situation that allows speculators to bypass all Commodity Futures Trading Commission regulations by trading on foreign exchanges. But without strong regulation of electronic exchanges and the derivatives products that enable speculators to move huge proportions of the futures markets underlying commodities, putting a bit of regulation into the London-based exchanges will not alleviate anything. Unless that's addressed, this bubble is going to take more than homes with it. It's going to

take lives.

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Corn Collapse Inevit
Ethanol glut means the industry will collapse inevitably. Businessweek May 15th 2006
Welcome to the ethanol boom, the closest America's farmers may get to an investment bubble. Since the proethanol State of the Union address in January, shares of Fresno-based Pacific Ethanol Inc. (PEIX ) have doubled, to 37. Green Plains Renewable Energy has risen 40%, to 46, since it began trading in MarchBut ethanol is
far from the sure moneymaker its boosters say it is. In fact, some of the very forces behind the boom might undermine ethanol's prospects as an investment over the next few years. The fuel, renewable and more environmentally friendly than gasoline, is already being used as a gas additive, replacing another additive that was found to pollute groundwater. The result: a squeeze on supplies that has doubled ethanol's wholesale price, to $2.75 a gallon, about what gasoline costs at wholesale. With corn prices low and gas prices high, ethanol's profit margin per gallon is at a record of more than $1. "You don't need Willie Nelson organizing concerts for these farmers," jokes Tom Kloza, an analyst for the Oil Price Information Service.Last year's energy bill requires gas marketers to sell at least 4 billion gallons of ethanol-blended fuel this year, rising to 7.5 billion gallons by 2012. That sparked a surge of investment. In April, Goldman Sachs (GS ) Group took a $26.8 million stake in Canadian outfit Iogen Corp. Archer Daniels Midland Co. (ADM ), meanwhile, tapped Patricia Woertz, a career oil woman (page 38), as its new CEO. Two U.S. companies recently filed for initial public offerings to finance more plants, while Spanish energy company Abengoa and Connecticut privateequity firm J.H. Whitney & Co. raised almost $300 million to do so. SURPLUS AHEAD? But all the new money might create an ethanol

glut. On Apr. 11, California projected that U.S. capacity required by 2009 would be online in under a year. Since that projection, at least four more companies
have announced plans to build plants. That's because a typical 50-million-gallon-a-year plant costs just $75 million or so to build, with banks willing to lend up to 70% of the cost, says Tom Murray, co-head of loan and debt capital markets at German bank WestLB. A new gasoline refinery costs $1 billion or more.Investors in ethanol plants will find themselves at the mercy of two commodity cycles: corn and gas.

According to simulations run by the University of Missouri's Food & Agriculture Policy Research Institute, corn prices over the next six years are likely to rise and ethanol prices to fall, resulting in a 25% or more drop in producers' profits. "The industry has outstripped our expectations and grown a lot faster than we thought," says institute program director Patrick
Westhoff.What of the promise of ethanol replacing gas? Don't count on it. General Motors Corp. (GM ) and Ford Motor Co. (F ) have made a push this year to promote vehicles that can run on gas or E85, a fuel that's 85% ethanol and 15% gasoline. But E85 gets worse mileage than gas, a problem if ethanol is costlier. And right now there are only about 600 E85 pumps nationwide.Ethanol's fans say the fuel is a blessing in this time of high gas prices and global warming.

But energy is a cyclical business. Prospecting in the cornfield might prove as risky as prospecting in an oil field.

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Plan solves investment bubble
Government Subsidies are inflating A dangerous investment bubble. The market needs to decide not the government. Washington Post May 24, 2006
You got to hand it to Elmer. When it comes to getting the government to subsidize the same activity not just once, but several times over, nobody can touch the American farm lobby -- not even the Alaskans.Let's consider the case of ethanol, which thanks to numerous government

policies has now overtaken Manhattan real estate, derivatives trading and high-tech start-ups as the investment opportunity du jour for the smart-money set. For starters, there's the 51-cent rebate on the federal fuel tax for every gallon of ethanol added by refiners to their gasoline products. Or, if they prefer, refiners instead can take a 54-cent credit off their federal income taxes.And then there is the federal mandate, written into last year's energy bill, that will require refiners to buy a minimum of 7.5 billion gallons of ethanol by the year 2012, nearly double the current production.To encourage investment in plants to turn corn, sugar or agricultural wastes into ethanol, there's a 10-cent-agallon tax credit for "small" producers, which is now defined as anyone producing up to 60 million gallons. At the current market price of $2.90 a gallon, that would be a $175 million-a-year business.And a full accounting
would also include the government's price supports for corn, including that used for ethanol.Of course, it wouldn't be right for the government to stimulate all that production and then open the border to cheap Brazilian ethanol, so Congress very thoughtfully imposed a 54-cents-a-gallon tariff on imported ethanol.And let's not forget the myriad state subsidies. They range from direct producer payments (16 states) and tax credits (seven states) and fuel tax reductions (eight states), to grants and subsidized loans and requirements that government car and bus fleets run on ethanol-based fuels.With all that government-

induced demand, and the price of gasoline going through the roof, it should be no surprise that the wholesale price of ethanol (a gasoline substitute) has reached $2.90 a gallon. That's double what it was only a year ago. And with the cost of ethanol production around $1.25 a gallon, that works out to an operating margin of more than 50 percent. It's no wonder, then, that investment capital is now pouring into renewable fuels. Everyone from Goldman Sachs, Bill Gates, Richard Branson and venture capitalist Vinod Khosla to any corn farmer with a credit line is getting into the game."We'll be the Arabs of the Midwest," John Becker, manager of an Iowa farm
cooperative, told The Post's Peter Slevin earlier this month. Yeah, right. You're probably thinking at this point that I'm dead set against government subsidies for ethanol. I'm not. Because of the economic, environmental and national security costs imposed on the country from excessive reliance on imported oil, it's probably a good idea for the government to engineer a shift to renewable fuels. But at this point, we're overdoing it.From what I can see, the most effective policies are the ones that boost demand for ethanol until the industry has a chance to attract capital, and develop cheaper and more plentiful sources of ethanol than corn, while attaining critical mass for the distribution network. The energy bill took a step in that direction by establishing a guaranteed floor for the market of 7.5 billion gallons a year. We could double that number, as some senators have proposed. Or we could follow Brazil's lead and require that all new cars be able to run on either ethanol or gasoline, which would add about $100 to the price of a car. To overcome the natural reluctance of big oil companies, the government could mandate that each gas station provide at least one ethanol pump by 2015.There's also an argument for a big increase in federal research spending to speed development of ethanol production based on agricultural waste material. President Bush is for that. So is Hillary Clinton.Beyond that, however, the government needs to step back and let the markets set prices, allocate capital, choose winning

technologies and balance supply and demand. Right now, all the overlapping incentives interact in ways that distort the price of corn and sugar and inflate the cost of farmland. They have created an investment bubble in corn-based ethanol that is almost certain to cause hardship and dislocation when it bursts. And, in the case of the fuel tax rebate, they may also create the perverse effect of subsidizing the already-record profits of independent refiners and major oil companies.By contrast, a simpler ethanol strategy that boosts demand for a variety of crops for energy
production could create just the right political and economic conditions to finally wipe out many agricultural support programs that cost taxpayers $20 billion a year, drive up food prices and stand in the way of trade agreements.

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Plan solve invest bubble
Ethanol subsidies keep investment high until corn prices choke it. Tyner 6/27- (Wally Tyner, June 27, 2008, “Biofuels, Energy Security, and Future Policy Alternatives,” BioEnergy, Purdue University, http://www.ces.purdue.edu/bioenergy/) Staying with the current fixed 51 cent per gallon subsidy would likely result in markets keeping the corn price high and stimulating investment in ethanol until the corn price chokes off profitability There would be some food cost increases due to higher corn prices Global impacts are very important and quite
difficult to estimate

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Price Stability
High Corn prices are reducing corn ethanol’s chances of being a viable alternative to foreign oil and diminishing the US’s hopes of becoming energy independent, which was small to begin with; a more costefficient alternative needs to fill the gap
Anthony Jaffee, July 17, 2008 ([Jaffee is a reporter for the Washington Times] “Corn Prices Threaten Ethanol; Analysts Doubt Costs Will Fall Anytime Soon; Brazil May Export Sugar-based Fuels to U.S.” Washington Times, Plugged In section, National Security pg B01, d/l: LexisNexis)

Spiraling corn prices have squeezed profits and stressed the U.S. ethanol industry in recent months - a phenomenon that threatens to destroy hope that American farmers could help end the country's dependence on oil imported from hostile nations. In June, VeraSun Energy, one of the country's largest ethanol producers, recently delayed opening three new ethanol
plants because of "volatility in the market," and a Citigroup analyst predicted last month that nearly three-quarters of U.S. ethanol plants could face a possible shutdown in coming months as profit turns negative. "One of the main reasons for high ethanol prices is that the cost of the feed stock has been soaring," said Jerry Taylor, senior policy analyst at the D.C.-based Cato Institute. "When

corn prices go up, its going to make it more expensive for an ethanol processor to make ethanol from corn." Corn prices this week fell below $7 a bushel for the first time in a month after peaking above $7.80 on July 2.
As recently as March, President Bush reiterated his support for ethanol as a means to reduce reliance on foreign energy supplies. "If you're dependent on oil from overseas, you have a national security issue," Mr. Bush said at the International Renewable Energy Conference in Sao Paulo, Brazil. "The vast majority of ethanol is coming from corn, and that's good. That's good if you're a corn grower. And it's good if you're worried about national security. I'd rather have our corn farmers growing energy than relying upon some nation overseas that may not like us." The

government spends roughly $7 billion in ethanol subsidies annually. Yet as food prices skyrocket, the prospect of corn ethanol becoming a significant alternative to foreign oil is diminishing. Analysts say the price of corn is unlikely to fall any time soon. A Chicago Board of Trade report released in May said that despite increased planting tight supply is likely to continue into next year. Alex Moglia, president of Chicago-based Moglia Advisors, which helps biofuel companies restructure, said 12 biodiesel and ethanol plants have declared bankruptcy in recent months and that the problems facing the ethanol industry are more profound and long-term than just corn and fuel costs. Difficulty finding financing, high costs of building new plants and general problems with the business model are taking there toll on the U.S. ethanol industry, he said. "I think the ethanol industry as a whole will have to reexamine its entire financial model and determine how it can make money," he said. "Many of these [ethanol] plants never met the objectives that they were designed and built to achieve." Many

experts say corn has limited potential for securing America's energy independence in the

first place. They say energy independence rests more on experimental cellulose-based ethanol made from switch grass, wood or other nonedible parts of plants.
"We're already seeing problems with corn prices and so forth at these levels, and its only going to get tougher from here," Mr. Taylor said. "It's hard to imagine any huge breakthroughs with corn yields or the ethanol production process because this is not something that was created yesterday." Available

land for growing more corn in the United States is limited, and while yield increases from existing farms are expected, corn has the potential to supply only a fraction of U.S. energy needs.

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Recession collapses ethanol industry
Brazil Institute Special Report | April 2007 | Issue No. 3 The Global Dynamics of Biofuels Potential Supp ly and Demand for Ethanol and Biodiesel in the Coming Decade Woodrow Wilson Center for International Scholars A global recession could easily lead to a drastic drop in crude oil prices, greatly diminishing the profitability of ethanol and deterring future investments in the industry. Even now, investments in alternative energy sources are risky given the lack of policy measures that insure against major oil price drops. For this reason, explained Tyner, alternative energy policies that protect against hydrocarbon price volatility, promote technological
research, and stimulate investment can lead in the direction of less reliance on hydrocarbons and lower greenhouse gas emissions.

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Food prices hurt ethanol industry
High food prices make ethanol uncompetitive. Masami Kojima and Todd Johnson October 2005 Energy Sector Management Assistance Programme (ESMAP) Potential for Biofuels for Transport in Developing Countries Sugar, maize, wheat, rapeseed, and soybeans are in the human food chain or used as animal feeds. As such, their prices depend on supply and demand on the food or animal feed market, making these feedstocks both relatively expensive and their prices highly variable. Because crop and crude oil prices do not necessarily move together— although transportation costs do increase with increasing crude price and, in the 1970s and 1980s, fertilizer prices moved with energy prices, both pushing up crop prices—in times of high crop and low crude oil prices, biofuels become uncompetitive. When crop prices are high, farmers have a much greater incentive to sell crops at the high crop price on the domestic or international market than to sell them at discounted prices to biofuel producers. This phenomenon has in the past led to periodic shortages of ethanol in Brazil, damaging the fuel ethanol market and the reputation of the industry.

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Cellulosic Shift
ALTERNATIVE BIOFUEL SOURCES EXIST BUT DON’T HAVE GOVERNMENTAL SUPPORT RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota)
One root of the problem is that the

biofuel industry has long been dominated not by market forces but by politics and the interests of a few large companies. Corn has become the prime raw material even though biofuels could be made efficiently from a variety of other sources, such as grasses and wood chips, if the government funded the necessary research and development. But in the United States, at least, corn and soybeans have been used as primary inputs for many years thanks in large part to the lobbying efforts of corn and soybean growers and Archer Daniels Midland Company (ADM), the biggest ethanol producer in the U.S. market. ALTERNATIVES TO CORN-BASED ETHANOL EXIST BUT CORN SUBSIDIES UNDERMINE THEIR GROWTH RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota) The benefits of biofuels are greater when plants other than corn or oils from sources other than soybeans are used. Ethanol made entirely from cellulose (which is found in trees, grasses, and other plants) has an energy ratio between 5 and 6 and emits 82 to 85 percent less greenhouse gases than does gasoline. As corn
grows scarcer and more expensive, many are betting that the ethanol industry will increasingly turn to grasses, trees, and residues from field crops, such as wheat and rice straw and cornstalks.

Grasses and trees can be grown on land poorly suited to food crops or in climates hostile to corn and soybeans. Recent breakthroughs in enzyme and gasification technologies have made it easier to break down cellulose in woody plants and straw. Field experiments suggest that grassland perennials could become a promising source of biofuel in the future. For now, however, the costs of harvesting, transporting, and converting such plant matters are high, which means that cellulose- based ethanol is not yet commercially viable when compared with the economies of scale of current corn-based production. One ethanol-plant manager in the Midwest has calculated that
fueling an ethanol plant with switchgrass, a much-discussed alternative, would require delivering a semitrailer truckload of the grass every six minutes, 24 hours a day.

subsidies and politics currently favoring the use of corn and soybeans, make it unrealistic to expect cellulose-based ethanol to become a solution within the next decade. Until it is, relying more on sugar cane to produce ethanol in tropical countries would be more efficient than using corn and would not involve using a staple food.
The logistical difficulties and the costs of converting cellulose into fuel, combined with the

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Food prices Internal Link - Generic
This food crisis creates and magnifies political instability and will collapse the global economy. Lester Brown, 10-5-07 president of the Earth Policy Institute “MASSIVE DIVERSION OF U.S. GRAIN TO FUEL CARS IS RAISING WORLD FOOD PRICES”
If you think you are spending more each week at the supermarket, you may be right. The

escalating share of the U.S. grain harvest going to ethanol distilleries is driving up food prices worldwide. Corn prices have doubled over the last year, wheat futures are trading at their highest level in 10 years, and rice prices are rising too. In addition, soybean futures have risen by half. A Bloomberg analysis notes that the soaring use of corn as the feedstock for fuel ethanol “is creating unintended consequences throughout the global food chain.” The countries initially hit by rising food prices are those where corn is the staple food. In Mexico, one of more than 20 countries
with a corn-based diet, the price of tortillas is up by 60 percent. Angry Mexicans in crowds of up to 75,000 have taken to the streets in protest, forcing the government to institute price controls on tortillas. Food

prices are also rising in China, India, and the United States, countries that contain 40 percent of the world’s people. While relatively little corn is eaten directly in these countries, vast quantities are consumed indirectly in meat, milk, and eggs in both China and the United States. Rising grain and soybean prices are driving up meat and egg prices in China. January pork prices were up 20 percent above
a year earlier, eggs were up 16 percent, while beef, which is less dependent on grain, was up 6 percent. In India, the overall food price index in January 2007 was 10 percent higher than a year earlier. The price of wheat, the staple food in northern India, has jumped 11 percent, moving above the world market price. In the United States, the U.S. Department of Agriculture projects that the wholesale price of chicken in 2007 will be 10 percent higher on average than in 2006, the price of a dozen eggs will be up a whopping 21 percent, and milk will be 14 percent higher. And this

is only the beginning. In the past, food price rises have usually been weather related and always temporary. This situation is different. As more and more fuel ethanol distilleries are built, world grain prices are starting to move up toward their oil-equivalent value in what appears to be the beginning of a long-term rise. The food and energy economies, historically separate, are now merging. In this new economy, if the fuel value of grain exceeds its food value, the market will move it into the energy economy. As the price of oil climbs so will the price of food. Some 16 percent of the 2006 U.S. grain harvest was used to produce ethanol. With 80 or so ethanol distilleries now under construction, enough to more than double existing ethanol production capacity, nearly a third of the 2008 grain harvest will be going to ethanol. Since the United States is the leading exporter of grain, shipping more than Canada, Australia, and Argentina combined, what happens to the U.S. grain crop affects the entire world. With the massive diversion of grain to produce fuel for cars, exports will drop. The world’s breadbasket is fast becoming the U.S. fuel tank. The number of hungry people in the world has been declining for several decades, but in the late 1990s the trend reversed and the number began to rise. The United Nations currently lists 34 countries as needing emergency food assistance. Many of these are considered failed and failing states, including Chad, Iraq, Liberia, Haiti, and Zimbabwe. Since food aid programs typically have fixed budgets, if the price of grain doubles, food aid will be reduced by half. Urban food protests in response to rising food prices in low and middle income countries, such as Mexico, could lead to political instability that would add to the growing list of failed and failing states. At some point, spreading political instability could disrupt global economic progress.

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Food prices Internal Link - Generic
Federal ethanol support is the root cause of global high prices Salt Lake Tribune 6/30/08 p. http://www.sltrib.com/Opinion/ci_9739773
If you think that food prices are high now, wait until the full effects of the flooding of farmland in the Midwest hit store shelves. Prepare to be pinched harder

The damage to crops from heavy rains and failing levies is the result of a natural disaster. But it's nothing compared to the unnatural disaster we're creating for ourselves by subsidizing food-based ethanol, blended with gasoline, at a minimum of 51 cents per gallon, reducing the cost you pay at the pump by mere pennies a gallon. Two new studies underscore the growing impact of federal ethanol mandates on food prices as more agricultural resources are diverted to biofuels. Dr. Thomas E. Elam found, for example, that increased fuel production spurred by the Renewable Fuels Standard of 2007 has had a barely measurable effect on the global energy market, the impact on food prices and food security are "huge." If the federal mandates remain the same, he said, the smaller corn crop due to heavy moisture "will be devastating to meat, dairy, and poultry producers. Consumers will suffer as food and fuel costs rise and supplies of corn-based food diminish. The overall economy will be damaged from higher inflation and lost jobs in the food production sector." Elam and Keith Collins, a former
at the checkout stand. chief economist for the U.S. Department of Agriculture who authored the other study, both dispute the U.S. Department of Agriculture's claim that federal

Collins found that retail food prices have jumped an estimated 23-35 percent beyond the normal increases that would be expected over a two-to-threeyear period. The renewable fuels standard, which mandates escalating reliance on ethanol, plays havoc with the normal price rationing that hits the market when supplies are down, as they are due to
biofuels policy has raised food prices by as little as 2-3 percent. flooding, he said. Growing ethanol production pushes demand for the smaller corn crop even higher, further reducing the country's grain stocks, which already Both researchers suggest that the government reduce or do away with federal support for corn-based ethanol, an industry that is growing anyway due to higher fuel prices. Lavishing federal subsidies on a food-based fuel that accounts for 20 percent of the rise in world food prices, harms the environment, and takes nearly as much energy from oil as it yields in clean fuel is, on its face, insane and morally bankrupt. Get rid of them. are "dangerously low."

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Food Prices Internal Link – generic
Food price increases result from increased biofuel production. Daniel De La Torre Ugarte and Lixia He, University of TennesseeAugust 22, 2007 in Wiley InterScience (www.interscience.wiley.com); DOI: 10.1002/bbb.16; Biofuels, Bioprod. Bioref. 1:92–102 (2007) Is the expansion of biofuels at odds with the food security of developing countries?
In 2007, projections were made in major food producing countries and regions. First, US President George W. Bush announced that the USA will cut its gasoline use by 20% over the next decade by requiring the use of 35 billion gallons of renewable and alternative fuels, including ethanol. Then the leaders of the European Union agreed that 20% of energy used there will come from renewable sources by 2020. In addition, the USA, China, India, Brazil, South Africa and the European Commission announced the creation of the International Biofuels Forum in March 2007. Member countries aim to work together to increase global production and use of biofuels and other renewable energies. If biofuels develop into a mainstream transportation fuel source in

the largest consumer countries, such as the USA, European Union, Japan, and China, they will inevitably have a global impact on world agricultural commodity markets and food supply. This concern has been emphasized recently by Lester Brown of the
Earth Policy Institute (EPI): ‘The food and energy economies, historically separate, are now merging. In this new economy, if the fuel value of grain exceeds its food value, the market will move it into the energy economy. As the price of oil climbs so will the price of food’.2 On May 8, 2007, UN-Energy released the guidelines on the rapidly growing bioenergy industry, ‘Sustainable Energy: A Framework for Decision Makers’, indicates that biofuel could have a

dual effect on food supplies. Energy crops could divert land, water and other resources away from food production, while, by making energy more widely and cheaply available, biofuels may also increase the availability of food by making energy services more widely and cheaply available in remote areas, thus supporting productivity growth in agriculture or other sectors with positive implications for food availability and access.3 The ongoing food versus fuel debate has been focused on limited resources and inputs for food versus fuel conversion. What is needed is a focus on the real causes of hunger, the possible impact of a coming ‘biofuel era’ on hunger and related issues, and the adjustments that may be needed to cope with it. The wide consensus may not be ignored: the world produces and has the capacity to produce enough food to feed everyone. However, there are more than 800 million food-insecure people globally. The obstacles to assured access to sufficient nutrition in most cases lay not in the production or supply of food, but in the distribution of it. Even when there is a food surplus at the country or local level, all people do not necessarily find food security. Poverty, infrastructure, health, and education all impact on food consumption. In some cereal-surplus countries, there are more underweight children than in countries with a food deficit owing to low incomes, imbalances in household food distribution and weak social support networks.4 The development of biofuel production and its use may have profound impacts on both food production and distribution in the world market and developing countries: changing patterns of food demand and supply; increasing energy supply and increased prices for major biofuel sources, such as corn, soybeans, sugar cane, sugar beets, will sooner or later have an effect on basic food prices. Food prices are one of the most important determinants of food access for the poor. The strengthening linkage between food and energy may increase food price variability, which will, in turn, affect basic food prices and food security in the short term rather than long term, since poor people have less flexibility in the short run.

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Food Prices Internal Link – generic
Massive increases in food prices as a result of ethanol production. Robbin S. Johnson former senior vice president of corporate affairs at Cargill Inc. and C. Ford Runge 2007 Distinguished McKnight University Professor of Applied Economics and Law and director of the Center for International Food and Agricultural Policy at the University of Minnesota. Ethanol:Train Wreck Ahead? Government policy is stoking unsustainable growth of the corn-based fuel. A more sober, diversified approach is needed. Issues in Science and Technology Fall http://www.issues.org/24.1/p_johnson.html
In the United States, the

explosive growth of the biofuels sector and its demand for raw stocks of plants has triggered run-ups in the prices not only of corn, other grains, and oilseeds, but also of crops and products less visible to analysts and policymakers. In Minnesota, land diverted to corn to feed the ethanol maw is reducing the acreage planted to a wide range of other crops, especially soybeans. Food processors
with contracts with farmers to grow crops such as peas and sweet corn have been forced to pay higher prices to keep their supplies secure. Eventually, these costs will appear in the prices of frozen and canned vegetables. Rising

feed prices are also hitting the livestock and poultry industries. Some agricultural economists predict that Iowa’s pork producers will be driven out of business as they are forced to compete with ethanol producers for corn. It is in the rest of the world, however, where biofuels may have their most untoward and devastating effects. The evidence of
these effects is already clear in Mexico. In January 2007, in part because of the rise in U.S. corn prices from $2.80 to $4.20 in less than four months, the price of tortilla flour in some parts of Mexico rose sharply. The

connection was that 80% of Mexico’s corn imports, which account for a quarter of its consumption, are from the United States, and U.S. corn prices had risen, largely because of surges in demand to make ethanol. About half of Mexico’s 107 million people live in poverty; for them, tortillas are the main source of calories. By December 2006, the price of tortillas had doubled in a few months to eight pesos ($0.75) or more per kilogram. Most tortillas are made from homegrown white corn. However, industrial users of imported yellow corn in Mexico (for animal feed and processed foods) shifted to using white corn rather than imported yellow, because of the latter’s sharp price increase. The price increase of tortillas was exacerbated by speculation and hoarding. In January 2007, public outcry forced Mexico’s new President, Felipe
Calderón, to set limits on the price of corn products. The International Food Policy Research Institute (IFPRI), in Washington, DC, has monitored the run-up in the demand for biofuels and provides some sobering estimates of their potential global impact. IFPRI’s Mark Rosegrant and his colleagues estimated the displacement of gasoline and diesel by biofuels and its effect on agricultural market prices. Given

rapid increases in current rates of biofuels production with existing technologies in the United States, the European Union, and Brazil, and continued high oil prices, global corn prices are projected to be pushed upward by biofuels by 20% by 2010 and 41% by 2020. As more farmers substitute corn for other commodities, prices of oilseeds, including soybeans, rapeseed, and sunflower seed, are projected to rise 26% by 2010 and 76% by 2020. Wheat prices rise 11% by 2010 and 30% by 2020. Finally, and significantly for the poorest parts of sub-Saharan Africa, Asia, and Latin America where it is a staple, cassava prices rise 33% by 2010 and 135% by 2020.

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Food Prices – Developing world
US CORN SUBSIDIES DIRECTLY INCREASED FOOD PRICES AROUND THE WORLD IRISH TIMES 08 (The Irish Times, July 29, 2008, “Biofuels usage,” Pg 13)
Minister for Energy Eamon Ryan has recognised this dichotomy and announced that Government plans for a nine-fold increase in biofuels usage by 2010 had been scrapped. He has also suggested to the EU Commission that its ambitious biofuel targets should be scaled back. That is a reasonable response to international concerns

some forms of biofuel production are not only horribly inefficient but are driving up food prices. Food riots around the globe in the first six months of this year are an indication of growing instability and public anger. Biofuel was hailed as the clean, green answer to climate change. Two years ago, President George Bush introduced large subsidies to promote the production of ethanol from corn and wheat, one-third of all corn production in the US is now utilised in this way. The result has been a spike in food prices around the globe as lower US grain exports impacted on local markets. It also encouraged speculation in commodities and food. Questions have been raised also about the role of government subsidies and the high energy cost in producing ethanol from grain.
that

US ETHANOL SUBSIDIES DIRECTLY AFFECT FOOD PRICES IN THE DEVELOPING WORLD WASHINGTON TIMES 08 (April 18, 2008, “Food lessons,” SECTION: EDITORIALS; A20)
The impact on the world food market of the rise in ethanol production in the United States in the last few years is a classic case of the unintended consequences of

Last year, Congress mandated a five-fold increase in the use of biofuels. Currently, a fifth of the U.S. corn crop is converted into fuel. Our legislative solons failed to realize that, on the margin, the corn used to make subsidized ethanol matters greatly in the global food market. Using tax dollars for U.S. subsidies is bad enough; it's all the worse when these subsidies turn out to exacerbate food shortages in developing countries. We hope that " global warmists " and ethanol pushers are attuned to the irony. The costs of their cutting-edge environmental and energy policies are being footed by Americans and by those in developing countries who can least afford them. Perhaps now global-warming alarmists will begin warming to nuclear energy.
poorly conceived public policy.

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Food Prices Developing World
LEADING EXPERTS HAVE CONCLUDED THAT FUEL PRICES ARE THE ROOT CAUSE OF INCREASED FOOD PRICES AND CORN ETHANOL WILL BE VIABLE WITHOUT SUBSIDIES BIOTECH BUSINESS WEEK 08 (July 14, 2008, “BIOTECHNOLOGY INDUSTRY ORGANIZATION BIO; Setting Aside the Renewable Fuel Standard Will Not Reduce Corn Prices,” SECTION: EXPANDED REPORTING; Pg. 1394) Biofuels are needed to help reduce fuel prices, which are the root cause of higher food prices, according to the available evidence. The Biotechnology Industry Organization today submitted comments to the U.S. Environmental Protection Agency (EPA)
opposing Texas Gov. Rick Perry's (R) request for a waiver of 50 percent of the Renewable Fuel Standard (RFS) mandate for production of ethanol from grain (see also Biotechnology Industry Organization BIO). BIO President and CEO Jim Greenwood said, "Texas has not demonstrated in its petition to the EPA that the higher costs for corn currently impacting its livestock and agriculture industries are the result of biofuel production. In fact,

Texas' own study of the problem shows that the soaring cost of oil is the primary cause of higher agricultural costs and food prices and that relaxing the RFS will not lower corn prices. "The RFS is designed to move the United States as rapidly as possible toward sustainable
production of advanced biofuels. Abandoning the RFS today would send a signal to the market that could undercut ongoing research and development in biotechnology

An April study by the Agricultural & Food Policy Center at Texas A & M University, cited by Texas in its petition to the EPA for a waiver, demonstrates that higher energy costs have had the most significant impact on food and grain prices by increasing the cost of production. Further, the study clearly shows that demand for biofuels is outpacing the Renewable Fuel Standard's mandate, due to increased fuel prices and state and federal requirements for clean fuels. The analysis concludes that relaxing the new RFS and reducing production of biofuels would not lower grain prices. The study is available at http://www.afpc.tamu.edu/pubs/2/515/RR-08-01.pdf. That conclusion is supported by further evidence, such as the testimony of Bruce A. Babcock of Iowa State University's Center for Agricultural and Rural Development before the U.S. Senate Committee on Homeland Security and Government Affairs on May 7, 2008. Babcock testified that eliminating the RFS would produce a 1 percent drop in the price of corn. He presented two general findings to the committee, saying that the price of corn will continue to rise and fall directly with transportation fuel prices and that "if high gasoline prices signal that we need alternative fuels, the corn ethanol industry will be there to contribute substantial amounts of transportation fuels even without government subsidies." The testimony is available at http://hsgac.senate.gov/public/_files/050708Babcock.pdf. Both U.S. Agriculture Secretary Ed Schafer and Council of Economic Advisors Chairman Ed Lazear have stated that ethanol production accounts for less than 3 percent of the increase in global food prices. Further, a Merrill Lynch analyst recently estimated that U.S. oil and gas prices would be 15 percent higher without biofuel production. The Advanced Biofuels & Climate Change Information Center presents the latest commentary and data on the environmental and other impacts of
that is vital to achieving that goal." biofuel production. Drop in and add your comments, at http://biofuelsandclimate.wordpress.com/.

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Food Prices – Developing World
CORN ETHANOL DIRECTLY INCREASES WORLDWIDE FOOD PRICES, ESPECIALLY IN DEVELOPING COUNTRIES, WHICH EMPIRICALLY LEADS TO MASSIVE INSTABILITY RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota) If oil prices remain high -- which is likely -- the people most vulnerable to the price hikes brought on by the biofuel boom will be those in countries that both suffer food deficits and import petroleum. The risk extends to a large part of the developing world: in 2005, according to the UN Food and Agriculture Organization, most of the 82 low-income countries with food deficits were also net oil importers. Even major oil exporters that use their petrodollars to purchase food imports, such as Mexico, cannot escape the consequences of the hikes in food prices. In late 2006, the price of tortilla flour in Mexico, which gets 80 percent of its corn imports from the United States, doubled thanks partly to a rise in U.S. corn prices from $2.80 to $4.20 a bushel over the previous several months. (Prices rose even though tortillas are
Biofuels may have even more devastating effects in the rest of the world, especially on the prices of basic foods. made mainly from Mexican-grown white corn because industrial users of the imported yellow corn, which is used for animal feed and processed foods, started buying

The price surge was exacerbated by speculation and hoarding. With about half of Mexico's 107 million people living in poverty and relying on tortillas as a main source of calories, the public outcry was fierce. In January 2007, Mexico's new president, Felipe Calderón, was forced to cap the prices of corn products. The International Food Policy Research Institute, in Washington, D.C., has produced sobering estimates of the potential global impact of the rising demand for biofuels. Mark Rosegrant, an IFPRI division director, and his colleagues project that given continued high oil prices, the rapid increase in global biofuel production will push global corn prices up by 20 percent by 2010 and 41 percent by 2020. The prices of oilseeds, including soybeans, rapeseeds, and sunflower seeds, are projected to rise by 26 percent by 2010 and 76 percent by 2020, and wheat prices by 11 percent by 2010 and 30 percent by 2020. In the poorest parts of sub-Saharan Africa, Asia, and Latin America, where cassava is a staple, its price is expected to increase by 33 percent by 2010 and 135 percent by 2020. The projected price increases may be mitigated if crop yields increase substantially or ethanol production based on other raw materials (such as trees and grasses) becomes commercially viable. But unless biofuel policies change significantly, neither development is likely.
the cheaper white variety.)

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ETHANOL SUPPORT DIRECTLY ENDANGERS WORLD SECURITY AND LEAVES HUNDREDS OF MILLIONS AT RISK OF STARVATION MCKIE AND STEWART 08 (The Observer (England), April 13, 2008, “FOCUS: GLOBAL THREAT: Hunger. Strikes. Riots. The food crisis bites:
Across the world a crisis is unfolding at alarming speed. Climate change, China's increasing consumption and the dash for biofuels are causing food shortages and rocketing prices - sparking riots in cities from the Caribbean to the Far East. Robin McKie and Heather Stewart report on the millions facing starvation - and the growing threat to global security,” Robin McKie [Robin McKie is the Observer science and technology editor] and Heather Stewart [Observer economics editor], SECTION: OBSERVER FOCUS PAGES; Pg. 22) It is a grim, unsettling story. Yet it is certainly not an exceptional one.

Across the world, a food crisis is now unfolding with frightening speed. Hundreds of millions of men and women who, only a few months ago, were able to provide food for their families have found rocketing prices of wheat, rice and cooking oil have left them facing the imminent prospect of starvation. The spectre of catastrophe now looms over much of the planet. In less than a year, the price of wheat has risen 130 per cent, soya by 87 per cent and rice by 74 per cent. According to the UN's Food and Agriculture Organisation, there are only eight to 12 weeks of cereal stocks in the world, while grain supplies are at their lowest since the 1980s. For the Devi family, and hundreds of
millions of others like them, the impact has been calamitous, as Robert Zoellick, the World Bank President, warned at this weekend's G7 meeting in Washington.

'This is not just about meals forgone today, or about increasing social unrest, it is about lost learning potential for children and adults in the future, stunted intellectual and physical growth,' he said. Without urgent action to resolve the crisis, he added, the fight against poverty could be set back by seven years. Not surprisingly, these swiftly rising prices have unleashed serious political unrest in many places. In Dhaka yesterday 10,000 Bangladeshi
Brandishing a bag of rice, he told startled delegates from the world's richest nations that the world was now perched at the edge of catastrophe. textile workers clashed with police. Dozens were injured, including 20 policemen, in a protest triggered by food costs that was eventually quelled by baton charges and teargas. In Haiti, demonstrators recently tried to storm the presidential palace after prices of staple foods leaped 50 per cent. In Egypt, Indonesia, Ivory Coast, Mauritania, Mozambique, Senegal and Cameroon there have been demonstrations, sometimes involving fatalities, as starving, desperate people have taken to the streets. And in Vietnam the new crime of rice rustling - in which crops are stripped at night from fields by raiders - has led to the banning of all harvesting machines from roads after sunset and to farmers, armed with shotguns, camping around their fields 24 hours a day. But what are the factors that led to this global unrest? What has triggered the price rises that have put the world's basic foodstuffs out of reach for a rising fraction of its population? And what measures must be taken by politicians, world

Economists and financiers point to a number of factors that have combined to create the current crisis, a perfect storm in which several apparently unconnected events come together with disastrous effects. One key issue highlighted at the G7 meeting was the decision by the US government, made several years ago, to give domestic subsidies to its farmers so that they could grow corn that can then be fermented and distilled into ethanol, a biofuel which can be mixed with petrol. This policy helps limit US dependence on oil imports and also gives support to the nation's farmers. However, by taking over land - about 20 million acres so far in the United States - that would otherwise have been used to grow wheat and other food crops, US food production has dropped dramatically. Prices of wheat, soya and other crops have been pushed up significantly as a result.
leaders and monetary chiefs to rectify the crisis? Not surprisingly, the first two of these questions tend to be the easier ones to answer.

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Food Prices – Starvation
ETHANOL PRODUCTION DIRECTLY INCREASES CROP PRICES, CAUSING GLOBAL FAMINE AND FOOD INSECURITY RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota) industry's growth has meant that a larger and larger share of corn production is being used to feed the huge mills that produce ethanol. According to some estimates, ethanol plants will burn up to half of U.S. domestic corn supplies within a few years. Ethanol demand will bring 2007 inventories of corn to their lowest levels since 1995 (a drought year), even though 2006 yielded the third-largest corn crop on record. Iowa may soon become a net corn importer. The enormous volume of corn required by the ethanol industry is sending shock waves through the food system. (The United States accounts for some 40 percent of the world's total corn production and over half of all corn exports.) In March 2007, corn futures rose to over $4.38 a bushel, the highest level in ten years. Wheat and rice prices have also surged to decade highs, because even as those grains are increasingly being used as substitutes for corn, farmers are planting more acres with corn and fewer acres with other crops. This might sound like nirvana to corn producers, but it is hardly that for consumers, especially in poor developing countries, who will be hit with a double shock if both food prices and oil prices stay high. The World Bank has estimated that in 2001, 2.7 billion people in the world were living on the equivalent of less than $2 a day; to them, even marginal increases in the cost of staple grains could be devastating. Filling the 25-gallon tank of an SUV with pure ethanol requires over 450 pounds of corn -- which contains enough calories to feed one person for a year. By putting pressure on global supplies of edible crops, the surge in ethanol production will translate into higher prices for both processed and staple foods around the world. Biofuels have tied oil and food prices together in ways that could profoundly upset the relationships between food producers, consumers, and nations in the years ahead, with potentially devastating implications for both global poverty and food security.
The

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Food Prices – Volatility
Biofuel causes massive food price volatility. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels
The above results

for the U.S. domestic market are important for international trade and food prices because the United States remains the world’s largest exporter of maize and wheat throughout the projection period, and of soybeans in 2006–08. Rapid expansion in global production of biofuels changes the price relationships among various agricultural commodities in the next three to four years. The U.S. share of world maize trade falls from 60– 70 percent to 55–60 percent. Ethanol demand is expected to be inelastic in the range of prices projected in the study. With a greater share of the maize market captured by inelastic demand that is also tied to the world oil market and much smaller stock levels in the United States, the study forecasts increased price volatility, especially in response to weather variability. Global expansion of biodiesel will result in prices of vegetable oils rising more than those of oilseeds and protein meals. ETHANOL SUBSIDIES HAVE DRIVEN RECENT RECORD PRICE SPIKES ECONOMIST 07 (“The end of cheap food,” Dec 6th 2007, From The Economist print edition, Rising food prices are a threat to many; they also present the world with an enormous opportunity) FOR as long as most people can remember, food has been getting cheaper and farming has been in decline. In 1974-2005 food prices on world markets fell by three-quarters in real terms. Food today is so cheap that the West is battling gluttony even as it scrapes piles of half-eaten leftovers into the bin. That is why this year's price rise has been so extraordinary. Since the spring, wheat prices have doubled and almost every crop under the sun—maize, milk, oilseeds, you name it—is at or near a peak in nominal terms. The Economist's food-price index is higher today than at any time since it was created in 1845 (see chart). Even in real terms, prices have jumped by 75% since 2005. No doubt farmers will meet higher prices with investment and more production, but dearer food is likely to persist for years (see article).
That is because “agflation” is underpinned by long-running changes in diet that accompany the growing wealth of emerging economies—the Chinese consumer who ate

the rise in prices is also the self-inflicted result of America's reckless ethanol subsidies. This year biofuels will take a third of America's (record) maize harvest. That affects food markets directly: fill up an SUV's fuel tank with ethanol and you have used enough maize to feed a person for a year. And it affects them indirectly, as farmers switch to maize from other crops. The 30m tonnes of extra maize going to ethanol this year amounts to half the fall in the world's overall grain stocks.
20kg (44lb) of meat in 1985 will scoff over 50kg of the stuff this year. That in turn pushes up demand for grain: it takes 8kg of grain to produce one of beef. But

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Food Prices – Crop Diversion
ETHANOL PRODUCTION DIVERTS CROPLAND, INCREASING PRICES OF FOOD AND FEED PRICES MILLER 08 (Tracy Miller, SPECIAL TO THE WASHINGTON TIMES, June 22, 2008, Stocking up on prices SECTION: COMMENTARY; B01)
The fact that many people in the world can afford better diets is something we should be thankful for, even if it results in higher food prices for us. What should concern

While a variety of factors have contributed to food price increases, the actions of the U.S. government to promote the production of corn for ethanol cannot be ignored. Joseph Glauber, the chief economist of the U.S. Department of Agriculture, predicts that 31 percent of the entire U.S. corn crop in 2008 and 2009 will be devoted to ethanol production. This growth in ethanol production is the result of the combination of a government mandate, a 51 cents per gallon tax credit for ethanol production, various other subsidies, and a 54 cents per gallon tariff on ethanol imports. U.S. government mandates for increased ethanol production ignore economic reality, diverting a growing portion of U.S. cropland from food production without taking account of the cost of doing so. As more land is used to produce corn, production of other crops has declined to the point where the United States has actually had to import wheat. Because the United States is a major producer and exporter of food and feed grains, reduced U.S. output has a major impact on world food and feed prices. As more corn is diverted from livestock feed to ethanol production, meat prices have risen as well. Corn is a very expensive source of fuel, not just because of
us, however, is how the U.S. government has contributed to the recent run-up in world food prices by subsidizing the production of biofuels. its value in feeding livestock, but because of the resources involved in converting it to fuel. The energy required to produce a gallon of ethanol is almost as much as the energy that results from burning the ethanol. When factoring in the other costs of using corn to produce ethanol, it should be evident why it is a waste of resources.

There is nothing inherently wrong with growing crops to produce fuel, even if doing so causes food prices to rise. Rather, the extent to which corn and other crops are used for fuel should be determined by the choices of consumers and producers in response to market prices unhampered by government intervention like those mentioned above - this is also known as free market prices. Because free market prices reflect
people's voluntary preferences, market prices serve as indicators of relative scarcity, reflecting the priorities of all who could potentially benefit from what could be produced from the land. Competition for resources in the market will result in use of those resources for purposes that consumers value the most. Without market prices, government officials lack the ability to estimate accurately the net benefits of additional ethanol production for society. Unlike consumers who bear the costs of their decisions through prices they pay in the market, government officials do not bear the full costs of their decision to subsidize ethanol.

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Food Prices – Arable Land
ETHANOL SUBSIDIES REDUCE ARABLE LAND SIMPSON 08 (JEFFREY, an influential Canadian journalist. For the past 23 years he has been The Globe and Mail's national affairs columnist. He has won all three of Canada's leading literary prizes — the Governor General's Award for non-fiction book writing, the National Magazine Award for political writing, and the National Newspaper Award [1] for column writing. He has also won the Hyman Solomon Award [2] for excellence in public policy journalism. In January, 2000, he became an Officer of the Order of Canada, The Globe and Mail (Canada), April 11, 2008, “Blame ethanol subsidies for those nasty global food fight,” SECTION: COMMENT COLUMN; Pg. A17) The subsidies lavished on ethanol are politically irresistible, but they have the knock-on effect of taking land out of food production, thereby limiting supply, thereby pushing up prices. Farmers also switch from other crops to corn, again reducing supply and driving up prices. The wealthy countries, led by those of the European Union, Japan, South Korea, the United States and Canada (to a lesser extent) have stymied world free trade for decades with outrageous agricultural subsidies. Farmers now account for a maximum of 4 per cent of the work force in these countries, yet their political influence has been, and remains, enormous. Now, some of them have found a new way of being subsidized, and governments have been
unable to resist. Advanced industrial countries blocked the importation of cheaper food from developing countries - try getting milk or poultry into Canada, or rice into

Now, the combination of factors, including soaring energy bills, has heightened demand. The rush to corn-based ethanol is driving up food prices in countries where the share of daily income on food greatly exceeds the share in developed countries.
Japan and South Korea, or sugar into the United States - that could have raised those countries' standards of living and helped consumers at home.

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Food Prices – Other commodities
RISING ETHANOL PRICES CREATES AN INCREASED DEMAND FOR OTHER CROPS, INCREASING THOSE PRICES ISTOOK 07 (December 3, 2007, “Ethanol policy - what a turkey,” Ernest Istook is a distinguished fellow in Government Relations) With almost a fourth of the corn crop now diverted to ethanol, it's costlier to feed the chickens, the hogs and the grain-fed cattle. Egg prices are up. Corn meal, corn syrup, and even my personal favorite (popcorn!) are pricier. So is almost all food, as other grains are in higher demand as a substitute for corn. Bottom line: America pays $9 billion a year more for our food because of ethanol policy. The problem is growing faster than any crop. A recent U.S. Department of Agriculture report says farmers are planting more corn rather than other grains, constantly reducing the supply and thus raising the price for those crops. High grain costs are discouraging farmers from raising cattle and other animals, thus further increasing meat and egg prices.
The food industry has a website outlining the ripple effect on our groceries.

RISING BIOFUEL PRODUCTION INCREASES OTHER COMMODITY PRICES RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota) With the price of raw materials at such highs, the biofuel craze would place significant stress on other parts of the agricultural sector. In fact, it already does. In the United States, the growth of the biofuel industry has triggered increases not only in the prices of corn, oilseeds, and other grains but also in the prices of seemingly unrelated crops and products. The use of land to grow corn to feed the ethanol maw is reducing the acreage devoted to other crops. Food processors who use crops such as peas and sweet corn have been forced to pay higher prices to keep their supplies secure -- costs that will eventually be passed on to consumers. Rising feed prices are also hitting the livestock and poultry industries. According to Vernon Eidman, a professor emeritus of agribusiness management at the University of Minnesota, higher feed costs have caused returns to fall sharply, especially in the poultry and swine sectors. If returns continue to drop, production will decline, and the prices for chicken, turkey, pork, milk, and eggs will rise. A number of Iowa's pork producers could go out of business in the next few years as they are forced to compete with ethanol plants for corn supplies.

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Food prices – Riots
BIOFUEL PRODUCTION IS THE MAIN CONTRIBUTOR TO FOOD PRICE INCREASES, CREATING SOCIAL UNREST ENVIRONMENTAL HEALTH PERSPECTIVES 08 (“Food vs Fuel: Diversion of Crops Could Cause More Hunger,” Spheres of Influence, Volume 116, June 2008) To be fair, no one is blaming the rapid price increases solely on biofuels—hunger and malnutrition were widespread before the bio- fuels boom began. According to the UN World Food Programme, 854 million peo- ple were undernourished in 2001–2003, and about 10 million people die of hunger and hunger-related diseases in an average year. However, demand for biofuel feedstocks is overwhelming a food supply system that was already overextended by surging demand. Moreover, the demand for biofuel affects even nonfeedstock crops, such as rice and wheat, as farmers plant feedstocks instead of food. The price of rice hit a record 3 April 2008, according to Forbes.com Market Watch, which added that “the World Bank estimated that 33 countries faced ‘social unrest’ because of soaring food and energy prices.” THE RECENT ETHANOL SURGE HAS INCREASED FOOD PRICES FOR AMERICAN HOUSEHOLDS AND HAS LED TO FOOD RIOTS AROUND THE WORLD LIEBERMAN 08 (April 2, 2008, “Time for Second Thoughts on the Ethanol Mandate,” Ben Lieberman, Senior Policy Analyst for Energy and Environment in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, Heritage Foundation)
Not surprisingly,

diverting corn from food to fuel use has raised food prices. At a little over $2 per bushel when the 2005 law was signed, the price of corn has surged above $5, primarily because a quarter of the crop is now used to produce energy. A host of corn-related foods, such as corn-fed meat and dairy, have seen sharp price increases. Wheat and soybeans are also up, partly as a result of fewer acres being planted in favor of corn. There's talk of inflation rising to levels not seen in decades as renewable mandates have conspired with other factors to drive up food prices. For corn farmers, the mandate has exceeded their wildest dreams, but for consumers, it has been an expensive double-whammy—higher costs to drive to the supermarket and higher prices once you're there. A recent study from Purdue University puts the added food cost from the renewable mandate at $15 billion in 2007—about $130 per household.[2] And that was from ethanol usage at a fraction of what will be required in the years ahead. Globally, with nearly a billion people at risk for hunger and malnutrition, the costs are far higher. Several anti-hunger organizations have weighed in heavily against current policies. An August 2007 United Nations report warns of "serious risks of creating a battle between food and fuel that will leave the poor and hungry in developing countries at the mercy of rapidly rising prices for food, land, and water."[3] There is evidence that this may already be happening, including foodrelated rioting in Mexico, Indonesia, Egypt, and the Philippines. . Subsidies on corn-based ethanol, mainly in the US are hurting poor countries and is the main cause for higher food prices Reuters on July 30, 2008 (“Biofuels major driver of food price rise - World Bank,” Reuters, d/l:

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Corn usage hurts staple crops
Staple crops such as soy are not planted as a result of biofuel policies. Brazil Institute Special Report | April 2007 | Issue No. 3 The Global Dynamics of Biofuels Potential Supp ly and Demand for Ethanol and Biodiesel in the Coming Decade Woodrow Wilson Center for International Scholars High prices do not necessarily mean profitable ethanol production. Babcock explained that because there was a negative dry mill margin over total cost (i.e. ethanol plants were not recouping construction and operating costs) there has been a sharp decline in plant construction. Few new ethanol plants will be constructed in 2007 or 2008 in the United States because costs incurred would outweigh probable benefits. Nonetheless, U.S. ethanol production is set to triple by 2010 through increased productivity and capacity utilization. Higher corn prices—due in large part to the increasing demand for ethanol—will lead to a steep increase in corn planted acreage, according to the models. The number of acres set aside for corn is set to increase 20 percent from 2006 to 2008, expanding to approximately 93 million acres. This land will come from farms previously producing soybeans (as well as conservation land), leading to a roughly 10 percent decrease in soybean planted acreage in the United States. The result will be a smaller supply of soybean and thus higher prices, paving the way for soybean producers such as Brazil and Argentina to meet the ensuing demand by greatly expanding their own production.

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AT Alt Cause  High Food Prices
ALTERNATE CAUSALITY ARGUMENTS AREN’T ENOUGH HERE. YES, THERE ARE OTHER FACTORS CONTRIBUTING TO HIGH FOOD PRICES, BUT THE ETHANOL MANDATE IS WHAT HAS THE MOST LASTING IMPACT. Cohen, 1 July 08 Bonner R. Cohen is a senior fellow at the National Center for Public Policy Research in Washington, DC. The Heartland Institute. Environment & Climate News. “Ethanol Comes Under Fire for Rising Food Prices.” "There are many factors that contribute to rising food prices, including government-induced demand for ethanol, rising oil and gasoline prices, strong economic growth in poorer countries, and a general weakening of the U.S. dollar against other currencies," Murphy noted. "But when 20 percent of U.S. corn production is being diverted from the dinner table to the gas tank, we can confidently say that the ethanol mandate has had--and will continue to have--a lasting impact on the price of food," Murphy said.

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Environment – Generic
Ethanol does more harm than it does good, supporting it only advocates a substance that destroys the environment and costs society more money
Ted Williams, March 11, 2005 ([For more than 30 years Ted Williams has been hailed as one of the foremost nature writers in the United States, with articles and columns that appear in a wide range of national magazines, from Fly Rod & Reel to Audubon] “Drunk on Ethanol,” Audubon Magazine, d/l: http://www.audubonmagazine.org/incite/incite0408.html)
With its 1990

amendments to the Clean Air Act, Congress tried a revolutionary strategy: regulating not just how gasoline was burned in motor vehicles but how it was made. The idea was to require the use of gasoline with at least 2 percent oxygen-containing
chemicals (oxygenates) in areas where clean-air standards weren't being met. This way more carbon monoxide, toxic hydrocarbons, and smog producing volatile organic compounds would get burned up. Senator Bob Dole (R-KS), Senator Tom Daschle (D-SD), and other politicians from the Corn Belt who had pushed this "reformulated gasoline program" were ecstatic. The

amendments created a new future for the corn-produced oxygenate ethanol (a.k.a. "white lightning" or grain alcohol), which hadn't found a decent market for anything save drinking despite $5 billion in federal subsidies. With the mandated use of "gasohol" (one part ethanol, nine parts gasoline), the moribund ethanol industry would spring heel-clicking from its wheelchair. Agribusiness would prosper. And America would get cleaner air and homegrown energy. It was going to be a win-win-win-win. Fourteen years later there are 78
ethanol plants in 19 states. More than half are being expanded, and scores of new ones will soon come online. Fully 10 percent of all corn grown in the United States goes into ethanol. And Senator Daschle, Representative Dennis Hastert (RIL), and President George W. Bush have been trying to legislate a mandate requiring states to increase the amount of ethanol used in reformulated gasoline from about 3 billion gallons to 5 billion gallons by 2012. But the

reformulated-gasoline program has turned out to be a colossal failure, and the ethanol industry has transmogrified into a sacrosanct, pork-swilling behemoth that gets bigger and hungrier with each feeding. Ethanol dirties the air more than it cleans it. Its production requires vast plantings of corn, which wipe out fish and wildlife by destroying habitat and polluting air, soil, and water. Of all crops grown in the United States, corn demands the most massive fixes of herbicides, insecticides, and chemical fertilizers, while creating the most soil erosion. Ethanol Crop farming results in harmful soil erosion and nutrient pollution of the water supply. Science Daily 2007. Increase in Ethanol Production from Corn could Significantly Harm Water Quality. http://www.sciencedaily.com/releases/2007/10/071010120538.htm Nutrient and sediment pollution in streams and rivers could also both be attributed to soil erosion. High sedimentation rates carry financial consequences as they increase the cost of often-mandatory dredging for transportation and recreation. The committee observed that erosion might be minimized if future production of biofuels looks to perennial crops, like switchgrass, poplars or willows, or prairie polyculture, which could hold the soil and nutrients in place better than most row crops. The committee also identified other ways that farming could be improved, such as conservation tillage and leaving most or all of the cornstalks and cobs in the field after the grain has been harvested.

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ADI 08 Ethanol Aff

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Environment – Dead Zone
CORN AND SOYBEAN CROPS CAUSE SOIL EROSION, WATER POLLUTION, AND A LOSS OF AQUATIC BIODIVERSITY RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota) Soybeans and especially corn are row crops that contribute to soil erosion and water pollution and require large amounts of fertilizer, pesticides, and fuel to grow, harvest, and dry. They are the major cause of nitrogen runoff -- the harmful leakage of nitrogen from fields when it rains -- of the type that has created the so-called dead zone in the Gulf of Mexico, an ocean area the size of New Jersey that has so little oxygen it can barely support life. In the United States, corn and soybeans are typically planted in rotation, because soybeans add nitrogen to the soil, which corn needs to grow. But as corn increasingly displaces soybeans as a main source of ethanol, it will be cropped continuously, which will require major increases in nitrogen fertilizer and aggravate the nitrogen runoff problem.
Should corn and soybeans be used as fuel crops at all?

Increased production of corn to meet ethanol demands threatens oxygen levels in Gulf of Mexico Liz Marshall, a senior economist at the World Resources Institute, 2007 Thirst For Corn: What 2007 Plantings Could Mean For The Environment
Downstream coastal areas have been grappling with the impacts of agricultural nutrient runoff for decades. Nutrient

runoff from agricultural lands in the Mississippi River Basin is the prime culprit in driving the size and duration of the annual “Dead Zone”—a seasonal phenomenon in which oxygen depletion causes an area of the Gulf of Mexico the size of Massachusetts to become uninhabitable to marine organisms. Although the dead zone no longer captures the national headlines it occupied when it was discovered in the early 1990s, the phenomenon persists and continues to grow, with adverse impacts on marine fi sh populations and coastal fi sheries. Despite regional efforts to
advance nutrient management objectives, progress has been slow in encouraging adoption of best management practices to reduce nutrient runoff, and

increased production of corn to meet ethanol demand threatens to signifi cantly exacerbate this issue.

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ADI 08 Ethanol Aff

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Environment – Dead Zone
Water supply is at severe risk from Ethanol production because of the high levels of pesticides and fertilizer use on the crops which run off into the water supply. Science Daily 2007. Increase in Ethanol Production from Corn could Significantly Harm Water Quality. http://www.sciencedaily.com/releases/2007/10/071010120538.htm The quality of groundwater, rivers, and coastal and offshore waters could be impacted by increased fertilizer and pesticide use for biofuels, the report says. High levels of nitrogen in stream flows are a major cause of low-oxygen or "hypoxic" regions, commonly known as "dead zones," which are lethal for most living creatures and cover broad areas of the Gulf of Mexico, Chesapeake Bay, and other regions. The report notes that there are a number of agricultural practices and technologies that could be employed to reduce nutrient pollution, such as injecting fertilizer below the soil surface, using controlled-release fertilizers that have water-insoluble coatings, and optimizing the amount of fertilizer applied to the land. A possible metric to gauge the impact of biofuels on water quality could be to compare the amount of fertilizers and pesticides used on various crops, the committee suggested. For example, corn has the greatest application rates of both fertilizer and pesticides per acre, higher than for soybeans and mixed-species grassland biomass. The switch from other crops or noncrop plants to corn would likely lead to much higher application rates of highly soluble nitrogen, which could migrate to drinking water wells, rivers, and streams, the committee said. When not removed from water before consumption, high levels of nitrate and nitrite -products of nitrogen fertilizers -- could have significant health impacts.

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ADI 08 Ethanol Aff

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Dead Zone Impacts
Widened dead zone hurts fisheries Elizabeth Carlisle, 1/5/2000, “The Gulf of Mexico Dead Zone and Red Tides,” http://www.tulane.edu/~bfleury/envirobio/enviroweb/DeadZone.htm
The blooms present in the Dead Zone are primarily nontoxic, and therefore pose no direct threat to other marine organisms and humans. Indirectly, however, they cause conditions that lead to oxygen depletion, making the Gulf uninhabitable for other organisms, and leading to social and economic loss for humans.

The Gulf of Mexico yields approximately forty percent of annual U.S. commercial fishing, as well as being home to many recreational fishing activities. There is growing concern over the safety of seafood as a result of the contamination and chemical pollution of fishing waters. One half of the shellfish producing areas along the gulf coast have either been permanently closed or declared indefinitely off-limits by health officials as a result of pollution. The same concerns have caused the closure of many oyster beds. Raw shellfish, such as oysters, clams, and mussels, are at the
greatest risk for contamination by bacteria and viruses from pollution. Direct costs include adverse health effects and lost sales of fish and shellfish products, but there are also indirect costs, such as restricted development or investment decisions in coastal aquaculture due to the potential for algal blooms.

Commercial and recreational fisheries in the gulf generate 2.8 billion dollars annually. This industry could be seriously affected by reduced food sources for fish and shrimp in hypoxic waters, which would lead to a reduction in the abundance of fish
and shrimp and declines in shrimp catch and catch efficiency due to the expansion of hypoxia.

This damages the overall US economy Derek J. Dostal, J.D. Candidate – University of Pennsylvania Law School, “The World Trade Organization At A Crosswords: Comment: Global Fisheries Subsidies: Will The WTO Reel In Effective Regulations?”, University of Pennsylvania Journal of International Economic Law, Winter 2005, 9336 U. Pa. J. Int'l Econ. L. 815, Lexis The commercial fishing industry is a significant part of many countries' economies. 25 In the United States, for example, the commercial fishing industry contributes $ 28 billion to the U.S.'s gross national product. 26 As a result of this positive impact on its economy, the U.S. has directed considerable resources toward carefully considering and creating sound ocean policy. 27

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ADI 08 Ethanol Aff

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Environment – Fertilizers
Demand for ethanol leads to high levels of nitrogen and phosphorus runoff into waterways Liz Marshall, a senior economist at the World Resources Institute, 2007 Thirst For Corn: What 2007 Plantings Could Mean For The Environment
Most of the increased corn production is met through scaling up continuous corn and corn-soybean rotations. The

water quality impacts of these changes in production are considerable, with aggregate nitrogen and phosphorus loss into waterways increasing at a rate faster than the rate at which acreage is brought into production (Figure
2). Under scenario 2, acreage in production increases by only .7%, but nitrogen runoff increases at more than three times that rate nationwide (2.3%), and by a much higher percentage in some parts of the northern plains, lake states, and Appalachian/mid-atlantic regions. Even under the best-case production scenario (Scenario 1), nitrogen and phosphorus runoff increase by up to 9% in some regions of the Northern Plains. These fi gures may be conservative estimates, as well; raising

corn prices relative to the price of nitrogen fertilizer provides an incentive for farmers to increase their use of N fertilizer in an effort to produce greater yields.

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ADI 08 Ethanol Aff

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Environment – Monocultures
CORN FARMERS ARE CREATING VULNERABLE MONOCULTURES AND DAMAGING WATER SOURCES WITH CHEMICALS AND IRRIGATION ALTIERI AND BRAVO 07 (“The ecological and social tragedy of crop-based biofuel production in the Americas,” March 20th, 2007, Miguel A Altieri, Professor of Agroecology University of California, Berkeley, Elizabeth Bravo) The scale of production needed to yield the projected crop mass will encourage industrial methods of monoculture corn and soybean production with drastic environmental side effects. Corn production leads to more soil erosion than any other US crop. Farmers throughout the Midwest have abandoned crop rotations to grow corn and soy exclusively, increasing average soil erosion from 2.7 tons per acre annually to 19.7 tons (Pimentel et al 1995). Lack of crop rotation has also increased vulnerability to pests, and therefore necessitates higher inputs of pesticides than most crops (in the U.S., about 41% of all herbicides and 17% of all insecticides are applied to corn—(Pimentel and
Lehman 1993)). Specialization in corn production can be dangerous: in the early 1970s when uniform high-yielding maize hybrids constituted 70% of all corn grown, a

crop vulnerability can be expected to grow in our increasingly volatile climate, causing ripple effects throughout the food supply. We should be considering the implications of tying our energy economy to that same fluctuating and volatile food system. Corn cultivation generally involves use of the herbicide atrazine, a known endocrine disruptor. Low doses of endocrine disruptors can cause developmental harm by interfering with hormonal triggers at key points in the development of an organism. Studies show that atrazine can result in sexual abnormalities in frog populations, including hermaphrodism (Hayes et al 2002). Corn requires large amounts of chemical nitrogen fertilizer, a major contributor to the ground and river water pollution responsible for the “dead zone” in the Gulf of Mexico. Median rates of nitrate application on US farmland range from 120 to 550 kg of N per hectare. Inefficient use of nitrogen fertilizers by crops leads to nitrogen-laden runoff, mostly in surface water or in groundwater. Aquifer contamination by nitrate is widespread and at dangerously high levels in many rural regions. In the U.S., it is estimated that more than 25% of drinking water wells contain nitrate levels above the 45 parts per million safety standard (Conway and Pretty, 1991). High nitrate levels are hazardous to human health, and studies have linked nitrate intake to metahemoglobinemia in children and gastric, and bladder and esophageal cancer in adults. Expansion of corn into drier areas, such as Kansas, requires irrigation, increasing pressure on already depleted underground sources such as the Ogallala aquifer in the Southwestern US. In parts of Arizona, groundwater is already being pumped at a rate ten times the natural recharge rate of these aquifers.
leaf blight that affected these hybrids led to a 15% loss in corn yields throughout the decade (Altieri 2004). . This sort of

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ADI 08 Ethanol Aff

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Environment – Soil Erosion
Ethanol Production causes soil erosion. Environmental Working Group . July 2008. Chemically Green. http://chemicallygreen.com/corn-ethanolbiofuel/ The current method of corn production generates significant amounts of excess soil erosion. Soil loss robs land of productivity (requiring more fertilizer inputs) and, when soil runs off farm fields, it has serious impacts on aquatic life and shortens the useful life of hydroelectric dams and drinking water reservoirs. According to the latest USDA National Resources Inventory (2003), the average rate of erosion for cropland was 4.9 tons per acre. With 2006 national average corn yields at 149 bushels per acre and average ethanol production at 2.7 gallons of ethanol per bushel of corn. It is estimated that soil losses from corn-ethanol production will be about 24 pounds (lbs) of soil per gallon of ethanol produced.

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ADI 08 Ethanol Aff

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Environment – Soil Pollution
The presence of ethanol in groundwater may exacerbate problems with the existing soil pollution TAD W. PATZEK, Department of Civil and Environmental Engineering, University of California ETHANOL FROM CORN: CLEAN RENEWABLE FUEL FOR THE FUTURE, OR DRAIN ON OUR RESOURCES AND POCKETS?, 2004
Use of ethanol as a gasoline additive has other environmental impacts. Most

gasoline is stored in underground tanks, which sometimes leak. Some 400,000 leaks have been reported in the U.S. since 1990 (EPA, 2003c). If a leak occurs, ethanol and gasoline contaminate soil and dissolve into groundwater. Ethanol is liked so much by the soil bacteria that they will metabolize it before anything else, including gasoline hydrocarbons (Powers et al., 2001). When these bacteria no longer consume gasoline components, the subsurface plumes of gasoline spread farther, and can poison more water wells. Hence, presence of ethanol in groundwater may exacerbate problems (Rice et al., 1999) with the existing soil pollution.

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ADI 08 Ethanol Aff

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Ethanol  Species loss
Ethanol Production leads to loss and degradation of wildlife habitat. Environmental Working Group . July 2008. Chemically Green. http://chemicallygreen.com/corn-ethanolbiofuel/ We are also concerned that farmers in some areas will be expanding corn acreage at the expense of wildlife habitat. Corn requires large amounts of fertilizers and pesticides, which, when coupled with its weak root system, make it highly susceptible to erosion. The subsequent results are environmentally damaging on several fronts. Sedimentation blocks sunlight needed by plants, clogs fish gills, and buries spawning grounds and food supplies for aquatic creatures. Pollutants, such as phosphorous and nitrogen, used in fertilizer can cause eutrophication, or reduced oxygen levels which kill or weaken many fish and crustacean species. Furthermore, land in crop production is much less likely to provide adequate nesting grounds for a variety of birds. A recent study by Farrand and Ryan found nesting on CRP lands to be ten times higher than on land in crop production.

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ADI 08 Ethanol Aff

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Ethanol  pesticides
Ethanol production increases herbicide and insecticide pollution. Environmental Working Group . July 2008. Chemically Green. http://chemicallygreen.com/corn-ethanolbiofuel/ More corn has also resulted in the use of more toxic chemicals in general, and weed killers, in particular. Again, water utilities will bear the cost of cleaning up this water. NASS estimated the 2005 corn crop consumed 157 million lbs of herbicides and 4.8 million lbs of insecticides. Though we do not have chemical loss factors, if corn from existing corn land is used as feedstock for the 2007 ethanol capacity, then 26 million lbs of herbicides and 821,000 lbs of insecticides use could be attributed to ethanol. This represents roughly 15% of the estimated 171 million pounds of herbicides and 5.3 million lbs of insecticides applied to the 2007 corn crop. That will include millions more pounds of Atrazine, a hormone-disrupting potential carcinogen, which water utilities across the Midwest now routinely pay to remove from drinking water.

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ADI 08 Ethanol Aff

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Ethanol  water shortages
Corn Ethanol production would result in dramatic water shortages globally. Lore, Michael. JD candidate, American University, Washington college of law. EXPLORING HOW TODAY'S DEVELOPMENT AFFECTS FUTURE GENERATIONS AROUND THE GLOBE: FEATURE: SUBSIDIES FOR CORN-DERIVED ETHANOL MAY LEAVE US THIRSTY. American University/Sustainable Development Law & Policy. 2007 A new report from the National Research Council ("NRC") indicates that ethanol from corn production may have a substantial negative impact on the U.S. water supply. n1 The U.S. ethanol subsidy program, $ 0.51 per gallon, is designed to help wean domestic dependence on foreign oil. However, subsidies for corn-derived ethanol may accelerate a domestic and global water crisis n2 without establishing national energy independence. Congress should eliminate inefficient subsidies for corn-derived ethanol in the upcoming Energy Bill because the over-production of corn for cornderived ethanol will likely accelerate the depletion of U.S. water quality and quantity. According to NASA and the World Health Organization, severe water shortages will affect four billion people by 2050 and southwestern states in the U.S. will face severe freshwater shortages by 2025. n3 U.S. corn production has several externalities that contribute to freshwater scarcity and environmental degradation. For instance, it creates more soil erosion and uses more herbicides and insecticides than any other U.S. crop. n4 These inputs become residues in well water. n5 These pesticides are arguably the cause of the Gulf of Mexico "dead zone," an ever-increasing seasonal phenomenon where nutrient runoff causes oxygen depletion in an area the size of Massachusetts, causing harmful impacts on marine and coastal fish populations. n6 Moreover, ethanol itself is likely to leak into ground water and cause harm to our drinking supply because ethanol will mainly be stored underground and there have been over 400,000 reports of leaks in the last few decades. n7 The NRC has taken alarm to statistics like these and undertook an extensive study to find answers to potential water concerns related to corn-derived ethanol. The NRC suggests alternative subsidies to reduce impacts of biofuels production on water use and quality, policies to encourage best agricultural practices and policies to encourage biofuels produced from some cellulosic alternatives rather than from corn. n8

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ADI 08 Ethanol Aff

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Ethanol  Water Shortages
Ethanol refineries consume massive amounts of the water supply. Science Daily 2007. Increase in Ethanol Production from Corn could Significantly Harm Water Quality. http://www.sciencedaily.com/releases/2007/10/071010120538.htm For biorefineries, the water consumed for the ethanol production process -- although modest compared with the water used growing biofuel crops -- could substantially affect local water supplies, the committee concluded. A biorefinery that produces 100 million gallons of ethanol a year would use the equivalent of the water supply for a town of about 5,000 people. Biorefineries could generate intense challenges for local water supplies, depending on where the facilities are located. However, use of water in biorefineries is declining as ethanol producers increasingly incorporate water recycling and develop new methods of converting feedstocks to fuels that increase energy yields while reducing water use, the committee noted. Corn Ethanol would consume a significant amount of the drinking water supply. Lore, Michael. JD candidate, American University, Washington college of law. EXPLORING HOW TODAY'S DEVELOPMENT AFFECTS FUTURE GENERATIONS AROUND THE GLOBE: FEATURE: SUBSIDIES FOR CORN-DERIVED ETHANOL MAY LEAVE US THIRSTY. American University/Sustainable Development Law & Policy. 2007 The perfect storm of high oil prices and record-breaking U.S. corn yields has allowed the powerful corn lobby to dictate many policies in the renewable energy debate. The Energy Policy Act of 2005 established the Renewable Fuel Standard ("RFS") that requires the use of 7.5 billion gallons of renewable fuels by 2012, with most of the renewable fuel originating from subsidized corn ethanol. n9 President Bush suggested a thirty-five billion gallon domestic ethanol target during his 2007 State of the Union Address. n10 Last June, the Senate voted 65-27 to expand the production of renewable fuels to thirty-six billion gallons by 2022, with fifteen billion to come from corn-derived ethanol. n11 The U.S. House of Representatives is in the process of negotiating an Energy Bill but House and Senate Democratic leaders intend to avoid the conference committee process and instead plan to bounce versions of their bills back and forth. n12 Therefore, critical debate over the impact of corn-derived ethanol subsidies on water supplies must occur immediately. The ethanol debate is complex and it
is perpetually evolving because new environmental externalities periodically emerge and prices of energy and food commodities perpetually change. Congress has the duty to include all future costs associated with ethanol in their energy and environmental impact analysis when developing federal policy related to subsidies that promote corn ethanol production. Over-farming to produce ethanol from corn will significantly erode drinkable water quantity and overused pesticides, herbicides, and fertilizers will eventually ruin the general quality of our water. Only a diligent analysis of all environmental factors and wise policy choices in the Energy Bill can supply the United States with its greatest needs while reflecting the country's highest values.

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ADI 08 Ethanol Aff

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Corn Ethanol  Deforestation
Ethanol Crops require the destruction of the forests and also costs a significantly more expensive subsidy than regular feed corn. Avery, dennis, 2005. U.S. Environment Can’t Afford big Ethanol. Center for Global Food Issues. http://www.cgfi.org/2005/07/07/us-environment-cant-afford-big-ethanol/ Worst of all, the Washington State bioscientists say it takes about 2.4 acres of land growing corn to support a car driving for a year on E85—gasoline with 15 percent ethanol mixed in. If we ran even 10 percent of our cars on the ethanol mix, that would take about 48 million more acres of good cropland away from Nature—or 100 million acres of poor cropland. U.S. national forests total only 191 million acres. Why would we have to take land away from Nature to grow ethanol? Because meat and feed demand is rising rapidly in densely-populated Asian countries where the alternative to imported corn is clearing highly-erodable tropical forests full of irreplaceable wild species. That’s a big reason why the World Trade Organization
and the Bush White House are right now negotiating to open the farm trade barriers which have kept American corn out of such massive markets as China, India and Indonesia. Farmers

like to say there’s a farm surplus, but in fact the market last year took all of the record corn yield from 79 million U.S. acres and wanted more. We paid the corn farmers far less subsidy on their feed corn than we did no their ethanol corn.

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ADI 08 Ethanol Aff

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AT Ethanol Solves warming
The use of ethanol does not reduce CO2 emissions. Doornbosch and Steenblik September 2007. Paris. Round Table on Sustainable Development. Gneral Secretariat. Neither should current biofuel support policies be championed for their supposed capacity to reduce GHGs or improve energy security. The cost of obtaining a unit of CO2-equivalent reduction through subsidies to biofuels is extremely high, well over $500 per tonne of CO2-equivalent avoided for corn-based ethanol in the United States, for example, with other researched countries not performing much better (Table A). The score is also not very favourable in terms of displacing fossil fuels. In most cases the use of biofuels roughly doubles the cost of transportation energy for consumers and taxpayers together. TAD W. PATZEK, Department of Civil and Environmental Engineering, University of California ETHANOL FROM CORN: CLEAN RENEWABLE FUEL FOR THE FUTURE, OR DRAIN ON OUR RESOURCES AND POCKETS?, 2004 Ethanol-in-gasoline seriously pollutes the air. The reactivity of the combined exhaust and evaporative emissions using the ethanolblended reformulated gasoline is estimated to be about 17% larger than those using the MTBE-blended reformulated gasoline (NRC, 1999). Ethanol does reduce the carbon monoxide emissions, but increases those of nitrogen oxides (NOx), acetaldehyde, and peroxy- acetyl-nitrate (PAN) (Rice et al., 1999). Finally, all the energy contained in cornethanol comes from fossil fuels, with their own emissions. In Appendix B it is shown that carbon dioxide sequestration by corn disappears when ethanol is produced from it, and there is no difference between the corn ethanol fuel and gasoline in CO2 emissions.

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ADI 08 Ethanol Aff

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Ethanol subs  Increase gas consumption
The SQ is a gas consumption subsidy. Harry de Gorter and David R. Just February 2008 Associate Professors, Department of Applied Economics and Management, Cornell University. The Law of Unintended Consequences: How the U.S. Biofuel Tax Credit with a Mandate Subsidizes Oil Consumption and Has No Impact on Ethanol Consumption
However, a tax credit with a binding mandate always generates an increase in gasoline consumption, the extent to which depends on the type of mandate. If it is a blend mandate (as in most countries outside the United States), the tax credit acts as a fuel consumption subsidy. Ethanol producers only gain indirectly with the increased ethanol demand resulting from the increase in total fuel consumption. Most of the market effects are due to the mandate with the tax credit only exacerbating the ethanol price increase and causing an increase in the gasoline price but a decrease in the consumer fuel price. For

a consumption mandate (as in the United States), the tax credit is even worse as it acts as a gasoline consumption subsidy. Market prices of ethanol do not change, even as the price paid by consumers for gasoline declines (while gasoline market prices rise). A tax credit is therefore a pure waste as it involves huge taxpayer costs while increasing greenhouse gas emissions, local pollution and traffic congestion, while at the same time providing no benefit to either corn or ethanol producers (or in promoting rural development) and fails to reduce the tax costs of farm subsidy programs but generates an increase in the oil price and hence wealth in Middle East countries. These social costs are
huge because the new mandate calls for 36 bil. gallons by 2022, to cost over $18 bil. a year in taxpayer monies alone. Even

if the mandate is not

binding initially, the

elimination of the tax credit will cause the mandate to bind or the mandate can be increased so our results still hold.

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ADI 08 Ethanol Aff

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Ethanol subs  Increase gas consumption

Ethanol tax credits in combination increase gasoline consumption. Harry de Gorter and David R. Just February 2008 Associate Professors, Department of Applied Economics and Management, Cornell University. The Law of Unintended Consequences: How the U.S. Biofuel Tax Credit with a Mandate Subsidizes Oil Consumption and Has No Impact on Ethanol Consumption
In analyzing mandates, we derive a stunning result:

U.S. policy of ethanol tax credits designed to reduce oil consumption does (or will do) the exact opposite. With a mandate, the tax credit is a direct gasoline consumption subsidy with no effect on ethanol consumption or prices and therefore does not help either corn or ethanol producers. To explain this, we first consider the effects of each policy alone (a mandate and a tax credit). Although
market prices for ethanol increase under each policy, consumer fuel prices always decline with a tax credit and increase with a mandate except when gasoline supply is less elastic than ethanol supply. The gasoline price is always higher with a mandate compared to a tax credit that generates the same ethanol price. This is because a mandate subsidizes ethanol production through an implicit tax on gasoline consumption. Consumers only see the blend price of the two fuels.

A tax credit alone is an ethanol consumption subsidy but most of the benefits go to ethanol producers because ethanol is typically a small share of total fuel consumption. Fuel consumers benefit indirectly
to the extent gasoline prices decline with increased ethanol production. With a tax credit or mandate, gasoline consumption declines but more so with a mandate (for a given ethanol price and production level). However,

a tax credit with a binding mandate always generates an increase in gasoline consumption, the extent to which depends on the type of mandate. If it is a blend
mandate (as in most countries outside the United States), the tax credit acts as a fuel consumption subsidy. Ethanol producers only gain indirectly with the increased ethanol demand resulting from the increase in total fuel consumption. Most of the market effects are due to the mandate with the tax credit only exacerbating the ethanol price increase and causing an increase in the gasoline price but a decrease in the consumer fuel price. For

a consumption mandate (as in the United States), the tax credit is even worse as it acts as a gasoline consumption subsidy. Market prices and consumption of ethanol do not change even as the price paid by consumers for gasoline declines (while gasoline market prices rise). A tax credit is therefore pure waste as it involves huge taxpayer costs while increasing greenhouse gas emissions, local pollution and traffic congestion, while at the same time providing no benefit to either corn or ethanol producers (or in promoting rural development) and fails to reduce the tax costs of farm subsidy programs but generates an increase in the oil price and hence wealth in Middle East countries. These social costs are huge because the new biofuel mandate calls for 36 bil. gallons by 2022, to cost over $18 bil. a year in taxpayer monies alone. When used in combination with a mandate, the effects of a tax credit in increasing the ethanol price under a binding mandate is not equal to the tax credit and is not necessarily so even if the mandate is not binding. The implication is that the effects of each policy are not additive when used in combination.

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ADI 08 Ethanol Aff

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Corn Ethanol  Warming

EXPANDED PRODUCTION OF BIOFUELS WILL INCREASE GREENHOUSE GAS EMISSIONS ALTIERI AND BRAVO 07 (“The ecological and social tragedy of crop-based biofuel production in the Americas,” March 20th, 2007, Miguel A Altieri, Professor of Agroecology University of California, Berkeley, Elizabeth Bravo) One of the main arguments of biofuel advocates is that these new forms of energy will help mitigate climate change. By promoting large-scale mechanized monocultures that require agrochemical inputs and machinery, an overall increase in CO2 emissions is more likely to be the end result. As carboncapturing forests are felled to make way for biofuel crops, CO2 emissions will increase, not decrease (Bravo 2006, Donald 2004). As countries in the Global South enter biofuel production, the plan is to export much of their production. Transport to other countries will greatly raise fuel use and gas emissions. Moreover, turning plant biomass into liquid fuels at the refineries produces immense quantities of greenhouse gas emissions (Pimentel and Patzek 2005). Global climate change is not going to be remedied by the use of industrial biofuels. There will need to be a fundamental shift in consumption patterns in the Global North The only way to stop global warming is to transition away from large-scale, industrial farming to small-scale and organic agriculture, and to decrease worldwide fuel consumption through conservation. Scientific evidence shows that burning ethanol actually increases GHG rather than reduce it
Douglas Auld, July 7, 2008 ([Auld is a journalist for the Toronto Sun] “Ethanol Experiment should end now,” The Toronto Sun, d/l: LexisNexis)

That ethanol will reduce GHG emissions at all is by no means certain; scientific evidence suggests the production and burning of a litre of wheat and corn ethanol may create more GHGs than a litre of conventional gasoline. It all depends on how the ethanol is made. One positive analysis suggests current policy supporting corn and wheat ethanol production will not significantly reduce GHG emissions, reducing output by perhaps 30 kilograms per year per Canadian. Initial studies on energy use and GHG emissions from ethanol failed to take into account all aspects of the production cycle, such as emissions from transportation or the effect of turning uncultivated land into farmland. Even taking the optimistic assumption that wheat and corn ethanol reduce GHG emissions, the total subsidies per tonne of CO2 offset from gasoline by ethanol will be over $300 per tonne, 10 times what the European Union carbon trading system is paying for the same reductions. Canada stumbled into this policy partly because of pressure on
governments to do something to reduce increasing GHG emissions. Ethanol seemed like a simple solution, but a second look has shown that this was an illusion. The Senate wisely encouraged the government to conduct a thorough cost benefit analysis of its ethanol plans before implementing any regulations. It is unlikely any foodbased ethanol subsidies and mandates could pass such a test. It will take a courageous politician to admit a mistake has been made, but courage and a better plan are exactly what Canada needs.

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ADI 08 Ethanol Aff

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Corn Ethanol  Warming
Increase corn production causes increases in GHG Liz Marshall, a senior economist at the World Resources Institute, 2007 Thirst For Corn: What 2007 Plantings Could Mean For The Environment Our analysis suggests that, as corn production increases to meet ethanol demand, GHG emissions from the agricultural sector also increase at a rate that is faster than the rate at which land is brought into production. (Figure 3) GHG emissions from the agricultural sector are expected to rise due to increases in both the extent of agriculture (i.e. new land being brought under production) and in the average GHGintensity of agriculture (because, on average, corn production is more GHGintensive than the cropping practice that it is replacing). The analysis predicts, for instance, a decline in continuous soybean
production, with its minimal nitrogen fertilizer demand, and an increase in more input-intensive corn-soybean and continuous corn rotations.

Research shows that corn-based ethanol production causes global warming. H. Joseph Herbert USA Today, 2008 The researchers said that past studies showing the benefits of ethanol in combating climate change have not taken into account almost certain changes in land use worldwide if ethanol from corn — and in the future from other feedstocks such as switchgrass — become a prized commodity. "Using good cropland to expand biofuels will probably exacerbate global warming," concludes the study published in Science magazine. The researchers said that farmers under economic pressure to produce biofuels will increasingly "plow up more forest or grasslands," releasing much of the carbon formerly stored in plants and soils through decomposition or fires. Globally, more grasslands and forests will be converted to growing the crops to replace the loss of grains when U.S. farmers convert land to biofuels, the study said.

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Corn Ethanol  Warming
It is not true that ethanol is environment friendly, studies shows that it will increase more greenhouse gasses than gasoline usage H. Joseph Herbert USA Today, 2008 During the recent congressional debate over energy legislation, lawmakers frequently cited estimates that corn-based ethanol produces 20% less greenhouse gases in production, transportation and use than gasoline, and that cellulosic ethanol has an even greater benefit of 70% less emissions. The study released Thursday by researchers affiliated with Princeton University and a number of other institutions maintains that these analyses "were one-sided" and counted the carbon benefits of using land for biofuels but not the carbon costs of diverting land from its existing uses. "The other studies missed a key factor that everyone agrees should have been included, the land use changes that actually are going to increase greenhouse gas emissions," said Tim Searchinger, a research scholar at Princeton University's Woodrow Wilson School of Public and International Affairs and lead author of the study. The study said that after taking into account expected worldwide land-use changes, corn-based ethanol, instead of reducing greenhouse gases by 20%, will increases it by 93% compared to using gasoline over a 30-year period. Biofuels from switchgrass, if they replace croplands and other carbon-absorbing lands, would result in 50% more greenhouse gas emissions, the researchers concluded.

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AT: Use Corn Stalks Solves Env
Cornstalks are needed to maintain soil nutrients level . Avery, dennis, 2005. U.S. Environment Can’t Afford big Ethanol. Center for Global Food Issues. http://www.cgfi.org/2005/07/07/us-environment-cant-afford-big-ethanol/ Some of the Green die-hards say we could make ethanol at less cost from the cornstalks and sell the corn. They don’t realize that the cornstalks are left on the field to maintain soil nutrients level—and to minimize soil erosion. Taking the stalks for ethanol plants would be an environmental sin—and we’d have to burn up still more liquid fuel to gather huge tonnages of them into an ethanol facility.

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Not enough land for corn ethano
Using corn ethanol could never fuel US consumption of motor fuels theres not enough land. Richard Conniff, 2007 2007 Guggenheim Fellow. Who's Fueling Whom? Why the biofuels movement could run out of gas * Smithsonian magazine, November 2007 http://www.smithsonianmag.com/sciencenature/presence-biofuel-200711.html?c=y&page=4
Switching to biofuels means getting our energy only from what we can grow in the present day, and that's not much. In

the course of a year, an acre of corn yields only as little as 60 gallons of ethanol, after you subtract the fossil fuels used to cultivate, harvest and refine the crop. So let's flash forward five years. Twice a month you swing by the biofuels station to fill the 25-gallon tank in your sporty flex-fuel econo-car. (Pretend you've kissed the SUV goodbye.) Even this modest level of energy consumption will require a ten-acre farm to keep you on the highway for a year. That might not sound too bad. But there are more than 200 million cars and light trucks on American roads, meaning they would require two billion acres' worth of corn a year (if they actually used only 50 gallons a month). The country has only about 800 million acres of potential farmland.

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Biofuels distract from other Alt. Energy
Too much focus on biofuels means we can’t achieve other sustainable solutions. Richard Conniff, 2007 2007 Guggenheim Fellow. Who's Fueling Whom? Why the biofuels movement could run out of gas * Smithsonian magazine, November 2007 http://www.smithsonianmag.com/sciencenature/presence-biofuel-200711.html?c=y&page=4
None of this means we should give up on biofuels. But we need to stop being dazzled by the word and start looking closely at the realities before blind enthusiasm leads us into economic and environmental catastrophes. We

also should not let biofuels distract us from other remedies. Conservation and efficiency improvements may not sound as sexy as biofuels. But they are typically cheaper, faster and better at dealing with the combined problems of global warming and uncertain energy supply. They also call on what used to be the defining American traits of thrift and ingenuity.

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Corn Ethanol energy inefficient
Reports showing positive energy returns on corn ethanol are false, a more viable alternative fuel needs to be found
David Pimentel and Tad W. Patzek, January 30, 2005 ([Pimentell is from the College of Agriculture and Life Sciences at Cornell University and Patzek is from Department of Civil and Environmental Engineering, University of California, Berkeley] “Ethanol Production Using Corn, Switchgrass, and Wood;Biodiesel Production Using Soybean and Sunflower,” Natural Resources Research, Vol. 14, No. 1, March 2005, d/l: http://www.springerlink.com/content/r1552355771656v0/fulltext.pdf)

The United States desperately needs a liquid fuel replacement for oil in the future. The use of oil is projected to peak
about 2007 and the supply is then projected to be extremely limited in 40–50 years (Duncan and Youngquist, 1999; Youngquist and Duncan, 2003; Pimentel and others, 2004a). Alternative liquid fuels from various sources have been sought for many years. Two

panel studies by the U.S. Department of Energy (USDOE) concerned with ethanol production using corn and liquid fuels from biomass energy report a negative energy return (ERAB, 1980, 1981). These reports were reviewed by 26 expert U.S. scientists independent of the USDOE; the findings indicated that the conversion of corn into ethanol energy was negative and these findings were unanimously approved. Numerous other investigations have confirmed these findings over the past two decades. A review of the reports that indicate that corn ethanol production provides a positive return indicates that many inputs were omitted (Pimentel, 2003). It is disappointing that many of the inputs were omitted because this misleads U.S. policy makers and the public. THE US CORN SUPPLY ISN’T SUFFICIENT TO MEET ENERGY DEMANDS RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford
Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota) And for what? Limited environmental benefits at best. Although it is important to think of ways to develop renewable energy, one should also carefully examine the

Ethanol and biodiesel are often viewed as environmentally friendly because they are plant-based rather than petroleum-based. In fact, even if the entire corn crop in the United States were used to make ethanol, that fuel would replace only 12 percent of current U.S. gasoline use. Thinking of ethanol as a green alternative to fossil fuels reinforces the chimera of energy independence and of decoupling the interests of the United States from an increasingly troubled Middle East.
eager claims that biofuels are "green."

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Corn Ethanol energy inefficient
BIOFUELS ARE ONLY MARGINALLY MORE FUEL-EFFICIENT AND ENVIRONMENTALLY FRIENDLY RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota)
Nor is corn-based ethanol very fuel efficient. Debates over the "net energy balance" of biofuels and gasoline -- the ratio between the energy they produce and the energy needed to produce them -- have raged for decades. For

now, corn-based ethanol appears to be favored over gasoline, and biodiesel over petroleum diesel -- but not by much. Scientists at the Argonne National Laboratory and the National Renewable Energy Laboratory have calculated that the net energy ratio of gasoline is 0.81, a result that implies an input larger than the output. Corn-based ethanol has a ratio that ranges between 1.25 and 1.35, which is better than breaking even. Petroleum diesel has an energy ratio of 0.83, compared with that of biodiesel made from soybean oil, which ranges from 1.93 to 3.21. (Biodiesel produced from other fats and oils,
such as restaurant grease, may be more energy efficient.) Similar results emerge when biofuels are compared with gasoline using other indices of environmental impact, such as greenhouse gas emissions. The

full cycle of the production and use of corn-based ethanol releases less greenhouse gases than does that of gasoline, but only by 12 to 26 percent. The production and use of biodiesel emits 41 to 78 percent less such gases than do the production and use of petroleum-based diesel fuels. Another point of comparison is greenhouse gas emissions per mile driven, which takes account of relative fuel efficiency. Using gasoline blends with 10 percent corn-based ethanol instead of pure gasoline lowers emissions by 2 percent. If the blend is 85 percent ethanol (which only flexible-fuel vehicles can run on), greenhouse gas emissions fall further: by 23 percent if the ethanol is corn-based and by 64 percent if it is cellulose-based. Likewise, diesel containing 2
percent biodiesel emits 1.6 percent less greenhouse gases than does petroleum diesel, whereas blends with 20 percent biodiesel emit 16 percent less, and pure biodiesel (also for use only in special vehicles) emits 78 percent less. On the other hand, biodiesel can increase emissions of nitrogen oxide, which contributes to air pollution.

In short, the "green" virtues of ethanol and biodiesel are modest when these fuels are made from corn and soybeans, which are energy-intensive, highly polluting row crops.

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Corn Ethanol energy inefficient
ETHANOL CANNOT BE A REPLACEMENT FOR GASOLINE ALTIERI AND BRAVO 07 (“The ecological and social tragedy of crop-based biofuel production in the Americas,” March 20th, 2007, Miguel A Altieri, Professor of Agroecology University of California, Berkeley, Elizabeth Bravo) Dedicating all present U.S. corn and soybean production to biofuels would meet only 12% of the country’s gasoline needs and 6% of diesel needs. Agricultural land area in the US totals 625,000 square acres. At present rates, meeting oil demand from biofuels would require 1.4 million square miles of corn for ethanol or 8.8 million square miles of soy for biodiesel (Korten 2006). South Dakota and Iowa already devote more than 50% of their corn to ethanol production, which has led to a diminishing supply of corn for animal feed and human consumption. Though one fifth of the US corn harvest was dedicated to ethanol production in 2006, it met only 3% of the US’s total fuel needs (Bravo 2006).

STUDIES PROVE THAT ETHANOL REQUIRES MORE ENERGY TO CREATE THAN IT PRODUCES ALTIERI AND BRAVO 07 (“The ecological and social tragedy of crop-based biofuel production in the Americas,” March 20th, 2007, Miguel A Altieri, Professor of Agroecology University of California, Berkeley, Elizabeth Bravo) Ethanol production is extremely energy intensive. To produce 10.6 billion liters of ethanol, the U.S. uses about 3.3 million hectares of land, which in turn requires massive energy inputs to fertilize, weed and harvest the corn (Pimentel 2003). These 10.6 billion liters of ethanol only provide 2% of the gasoline utilized by cars in the U.S. per year. Despite the studies of Shapouri et al (2004) from the USDA that report a net energy positive return for ethanol production, Pimentel and Patzek (2005), utilizing data from all 50 states and accounting for all energy inputs ( including farm machinery manufacture and repair and fermentation-distillation equipment) conclude that ethanol production does not provide a net energy benefit. Rather, they claim it requires more fossil energy to produce than it produces. In their calculations, corn ethanol production requires 1.29 gallons of fossil fuels per gallon of ethanol produced, and soy biodiesel production requires 1.27 gallons of fossil energy per gallon of diesel produced. In addition, because of the relatively low energy density of ethanol, approximately three gallons of ethanol are needed to displace two gallons of gasoline.

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Corn Ethanol energy inefficient
Conversion of corn to ethanol spends more energy than it saves Environmental News Service www.ens-newswire.com, 2005 "When you first consider ethanol, it feels like you're being progressive and environmentally friendly," said Jason Lee, an undergraduate at UC Berkeley who helped author the paper. "But, if you dig underneath, you find that it's really misleading. The amount of fuel and oil needed to use ethanol is greater than the value of energy ethanol provides. It's ridiculous to think it would decrease our dependence on oil." É Patzek said that studies showing energy gain do not take into account the amount of energy stored in the corn. "The energy stored in the corn is not free," he said. "To grow the corn, you've used up soil and water. We must also account for the disposal of waste water polluted by nitrogen and phosphate fertilizers, as well as by pesticides and herbicides." When calculating the net energy loss, Patzek and his students took into account the energy equivalent contained within one bushel of corn. According to the report, it takes a total of 0.87 gallons of gasoline equivalent to grow one bushel of corn, which itself contains 3.17 gallons of gasoline equivalent energy. That calculation includes the fossil energy expended from the use of fertilizer, pesticides, machinery, irrigation and other inputs in corn production. After the corn is produced, it then takes another 0.89 gallons of gasoline equivalent to ferment and distill one bushel of corn into 2.66 gallons of ethanol, Patzek's team calculates. In addition, ethanol does not pack as much energy as gasoline because of its lower heating value. The paper points out that the energy of 2.66 gallons of ethanol is equivalent to 1.74 gallons of gasoline. So, the energy input of 4.93 gallons of gasoline equivalent leads to an energy output of 1.74 gallons of gasoline equivalent, or a net energy loss of 65 percent. Ethanol is not cost efficient and only yields 10 percent more energy that it costs to produce. Avery, dennis, 2005. U.S. Environment Can’t Afford big Ethanol. Center for Global Food Issues. http://www.cgfi.org/2005/07/07/us-environment-cant-afford-big-ethanol/ The Energy Bill passed by the Senate would require the U.S. to produce 8 billion gallons of ethanol per year. That’s a bad idea, for America and our environment. The ethanol lobby told Congress that subsidizing 8 billion gallons of ethanol “would replace 2 billion barrels of imported crude oil.” Actually, it would take 156 billion gallons of ethanol to replace 2 billion barrels of crude oil, since there are 42 gallons in a barrel of crude, and ethanol yields 25 percent less energy per gallon than gasoline. Worse, a new study by Washington State University researchers—just published in Bioscience—says that U.S. ethanol yields only about 10 percent more energy than it takes to make it. That means most of the effort and cash invested in the ethanol plants is wasted. To get even that, we’re having to subsidize the ethanol to the tune of 50 to 70 cents per gallon, or 60-80 percent more cost per mile of driving than a gallon of gasoline before the recent oil price spike.

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Corn Ethanol energy inefficient
Most reports show negative net energy gain from corn ethanol TAD W. PATZEK, Department of Civil and Environmental Engineering, University of California ETHANOL FROM CORN: CLEAN RENEWABLE FUEL FOR THE FUTURE, OR DRAIN ON OUR RESOURCES AND POCKETS?, 2004
Figure 1 summarizes the overall energy balance of ethanol production from corn. Our calculations

are based on the following three assumptions. The low heating values of gasoline and ethanol are 116,000 and 76,000 Btu/gal, respectively, cf. Table I and references therein. The calorific value of moist corn grain is (Pimentel and Dazhong, 1990) 6,500 Btu/lb. Note that this value is much lower than the calorific value of dry corn flour (Ramos et al., 1999): 8,470 Btu/lb. Table III summarizes the net energy gain or loss from corn ethanol according to different sources. It was first published in (Shapouri et al.,
1995), amended in (Shapouri et al., 2002), and here. The last column of this table shows the net energy balance of ethanol production. The negative numbers mean that more energy is used to produce ethanol than can be gained by burning it, and the positive numbers mean the opposite. We

have critically reviewed and checked for consistency the various estimates listed in Table III. The three papers by Pimentel and others (Pimentel, 1991, 2001, 2003), and the paper by Keeney and DeLuca (Keeney and DeLuca, 1992) report negative net energy for ethanol. The conference paper by Ho (Ho, 1989) is not quite complete, but it also estimates the net ethanol energy to be negative. All others, most notably the USDA, report net energy gain from ethanol. We have found Pimentel’s numbers to be consistent and reliable. The USDA uses the unjustified high heating value for ethanol and omits some of the energy inputs. The
2002 USDA report builds upon the 1997 Argonne National Laboratory Report (Wang et al., 1997), which is analyzed in more detail in Appendix A.

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Biofuels don’t solve oil price variability.
Biofuels don’t solve oil price variability. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Increasing biofuel production from a particular crop could also link that crop’s prices to petroleum fuel prices. For the foreseeable future, biofuel production will remain small relative to petroleum fuel production, and biofuels largely will continue to be price takers rather than drivers of transportation fuel prices. One study suggests that diverting more than about 10 percent of a given crop to the biofuel market could link the price movement of that crop to the world petroleum market (LMC International 2006). Thus, large-scale production of biofuel would not protect consumers against high petroleum prices for long, because feedstock prices would rise and reduce the price gap between petroleum and biofuel. As such, biofuels are unlikely to become the answer to high crude oil prices.

Ethanol does not solve oil price volatility. Masami Kojima and Todd Johnson October 2005 Energy Sector Management Assistance Programme (ESMAP) Potential for Biofuels for Transport in Developing Countries Another potential benefit cited in replacing petroleum fuels with biofuels is lower exposure to the volatility in the world oil market. In a liberalized market, biofuel prices will track petroleum fuel prices as long as biofuels represent a fraction of the total petroleum fuel consumption. Where there are barriers to free trade of biofuels (which is the current situation) or where the government controls biofuel pricing, biofuel and petroleum fuel prices may be de-linked to an extent, but these restrictions introduce problems of their own. Further, where there is non-market allocation of biofuels and consequently biofuel prices do not track petroleum fuel prices, biofuel prices are subject to volatility of agricultural output and crop prices. As chapter 5 shows, the volatility of world raw sugar prices has not been any smaller than that of gasoline prices in recent decades. In assessing this category of benefits and costs, the economic analysis should be conducted over a range of years using actual and forecast data and should take advantage of risk and uncertainty and related modeling techniques.

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AT: Ethanol reduces oil dependency
Ethanol does not reduce American oil dependence. Robert Bryce March 2007. “America: Burning Food as Fuel.” Energy Tribune Publishing. www.energytribune.com. The American corn ethanol industry is a prime example of this same isolationist, something-fornothing worldview. Promoters of corn ethanol, who seem to be multiplying by the day, argue that their fuel reduces U.S. dependence on foreign oil and therefore increases America’s national security. But exactly which foreign oil producers are so dangerous? Does the crude that comes from such notoriously belligerent terrorist havens as Canada and Mexico – respectively, the largest and second-largest suppliers to the U.S. market – pose a threat to American security? That same ethanol crowd prefers to ignore the fact that surging ethanol fuel production has led to a dou-bling of the price of corn. Thus, while America gorges itself on etha-nol, impoverished citizens in Mexico are marching in the streets because their tortillas now cost twice as much. My favorite example of the free lunch viewpoint: a service station in Omaha that claims to be selling “terror-free” gasoline. The sta-tion, which opened in mid-February, is funded by a group of opera-tives on the East Coast who refuse to reveal their business ties or backgrounds. The station claims to sell only oil that comes from outside the Middle East. A placard above its fuel pumps declares that customers can “rest assured” that the fuel they are buying is “assisting in the global war on terror.” Ah, but the devil’s in the details. The station owners say they only buy gasoline from Sinclair Oil, which gets most of its oil from the U.S. and Canada. But Sinclair also admits that it buys some of its oil on the New York Mercantile Exchange, which, of course, sells oil from all over the world. All of this shows that purity in the gasoline business, just like that free lunch, is awfully hard to find.

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Food Aid Add-on
HIGH PRICES DECREASE FOOD AID GIVEN TENENBAUM 08 (David J. Tenenbaum is a Wisconsin-based magazine freelancer who penned four books in Arco’s Toolbox series for professional builders.ENVIRONMENTAL HEALTH PERSPECTIVES, “Food vs Fuel: Diversion of Crops Could Cause More Hunger,” Spheres of Influence, Volume 116, June 2008) High prices are also pinching food aid. According to Rising Food Prices Intensify Food Insecurity in Developing Countries, a February 2008 report from the U.S. Department of Agriculture (USDA) Economic Research Service, the global food aid budget would need to rise about 35% over the next decade in order to maintain the 2006 level of 8 million tons of food aid Complacency in the face of famine is murder, there is more than enough food to feed every hungry person. Africa News, June 30 2007 “Africa: Food for 12 billion. So why did 854 million go without?” http://www.africa-interactive.net/index.php?PageID=5038 accessed July 2, 2007 SS
"As

you are suffering from over-consumption, I am suffering from under-consumption. We need to strike a balance," said Mary Wahu Kaara from the Kenya Debt Relief Network with reference to the North and the South. Her words were echoed by Hilkka Pietila, honorary president of the World Federation of United Nations Associations: "We are wasting food in the North. We are eating too much, burning grain as fuel, and growing grain to feed pigs to slaughter for ham." Their contributions were part of a heated debate
over the past two days about the eradication of hunger, this at the Civil Society Development Forum. The three-day meeting is being hosted by the Conference of Non-governmental Organisations in Consultative Relationship with the United Nations (CONGO) and the United Nations Millennium Campaign. It ends Saturday. Jean Ziegler, U.N. special rapporteur on the right to food, alerted the more than 500 delegates that while 854 million people went without food

in the world last year, enough food was produced to feed 12 billion people. "This is why a child that dies from famine is murder," Ziegler said.

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Food Aid Add-on
ETHANOL PRODUCTION DIRECTLY UNDERMINES WORLD HUNGER RELIEF EFFORTS, CREATING MASS STARVATION AND DEATH RUNGE AND SENAUER 07 (C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota)
Participants in the 1996 World Food Summit set out to cut the number of chronically hungry people in the world -- people who do not eat enough calories regularly to

The Millennium Development Goals established by the United Nations in 2000 vowed to halve the proportion of the world's chronically underfed population from 16 percent in 1990 to eight percent in 2015. Realistically, however, resorting to biofuels is likely to exacerbate world hunger. Several studies by economists at the World Bank and elsewhere suggest that caloric consumption among the world's poor declines by about half of one percent whenever the average prices of all major food staples increase by one percent. When one staple becomes more expensive, people try to replace it with a cheaper one, but if the prices of nearly all staples go up, they are left with no alternative. In a study of global food security we conducted in 2003, we projected that given the rates of economic and population growth, the number of hungry people throughout the world would decline by 23 percent, to about 625 million, by 2025, so long as agricultural productivity improved enough to keep the relative price of food constant. But if, all other things being equal, the prices of staple foods increased because of demand for biofuels, as the IFPRI projections suggest they will, the number of food-insecure people in the world would rise by over 16 million for every percentage increase in the real prices of staple foods. That means that 1.2 billion people could be chronically hungry by 2025 -- 600 million more than previously predicted. The world's poorest people already spend 50 to 80 percent of their total household income on food. For the many among them who are landless laborers or rural subsistence farmers, large increases in the prices of staple foods will mean malnutrition and hunger. Some of them will tumble over the edge of subsistence into outright starvation, and many more will die from a multitude of hunger-related diseases.
be healthy and active -- from 823 million in 1990 to about 400 million by 2015.

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Protectionism Add-on
Support for biofuels must not include subsidies- it not only devastates developing nations, but it ensures that they will continue to be used in the future and expand protectionism. World Development Report 2008 (‘Biofuels: The Promise and the Risk,” World Trade Organization, http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTWDRS/EXTWDR2008/0,,c ontentMDK:21501336~pagePK:64167689~piPK:64167673~theSitePK:2795143,00.html) To date, biofuel production in industrial countries has developed behind high protective tariffs on biofuels, in conjunction with large subsidies paid to biofuel producers. Such policies are costly to developing countries that are, or could become, efficient producers in profitable new export markets. Poor consumers also pay higher prices for food staples as grain prices rise in world markets, a rise that is largely induced by distortionary policies. Can developing countries, apart from Brazil, benefit from developing biofuel industries? The favorable
economic conditions and the large environmental and social benefits that justify significant subsidies are probably uncommon for first-generation technologies. In some cases, such as with landlocked countries that import oil and that could become efficient producers of sugarcane, the high costs of transport could make biofuel production economically viable even with current technologies. The much higher potential benefits of second-generation technologies, including technologies for small-scale biodiesel production, justify substantial privately and publicly financed investments in research. The

challenge for governments in developing countries is to avoid supporting biofuels through distortionary incentives that might displace alternative activities with higher returns—and to implement regulations and to devise certification systems that will reduce environmental and food security risks from biofuel production. Governments need to carefully assess economic, environmental, and social benefits and the potential to enhance energy security. Reducing potential environmental risks from large-scale
biofuels production could be possible through certification schemes to measure and communicate the environmental performance of biofuels (for example, a green index of GHG reductions). But the effectiveness of certification schemes requires participation from all major producers and buyers as well as strong monitoring systems.

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Trade Add-on
Ethanol opens up jobs and options for fair trade. <Robert Zubrin, senior engineer with the Martin Marietta Astronautics company, author, Energy Victory, Prometheus Books, 2007>

we actually have a labor shortage in America right now, as shown by the fact that we need to bring in millions of immigrants to do the work available. So rather than exercise our alcohol option for energy autarchy, it would behoove us to create jobs south of the border by buying much of our methanol and ethanol abroad. Because, unlike oil, the sources of alcohol are so diverse, we can allow ourselves to count upon importing a significant fraction of our supply without impacting our safety. The advantage of doing this is that by allowing the tropical agrarian countries to produce some of our alcohol, we will  put money in their hands that they can use to buy our manufactured goods, such as tractors and harvesters to grow the fuel crops, trucks to transport them, and equipment to process the biomass into liquid fuel. It's called fair trade, and it benefits everyone. The hydrogen economy offers no possibility for enhancing world trade, because hydrogen cannot be transported economically. But alcohol can. By opening up the world trading system, the alcohol economy offers the prospect a new age of global development. Half the world's people need not remain imprisoned in poverty: their aspirations crushed, their creative gifts strangled. They can escape. To do so, they don't need charity, expert advice, or conde- scending coercion. What they need is a piece of the action. The alcohol economy will make that possible.  
But

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Budget deficit Add-on
Corn ethanol costs the federal government a quarter trillion dollars over 15 years. William Yeatman 2007 Energy Policy Analyst at the Competitive Enterprise Institute. Compet i t ive Enterprise Inst i tute July 31, 2007 No. 118 Ethanol is a Budget Buster Increased Mandate and Subsidies Would Raise Food Prices and Strain Federal Budget The link between ethanol mandates and higher food prices has been demonstrated amply in the media. What has received scant media attention is the fact that the increased ethanol mandate proposed by President Bush, passed by the Senate, and now before the House, is a budget buster; it would cost American taxpayers almost a quarter trillion dollars or more over the next 15 years. Given that entitlement spending is set to skyrocket as baby boomers retire, the enormous costs of ethanol mandates threaten to become an unmanageable budget liability. Pay-go means the taxpayers pay the greatest burden of this policy. William Yeatman 2007 Energy Policy Analyst at the Competitive Enterprise Institute. Compet i t ive Enterprise Inst i tute July 31, 2007 No. 118 Ethanol is a Budget Buster Increased Mandate and Subsidies Would Raise Food Prices and Strain Federal Budget
The federal budget implications of ethanol production quotas are not widely known because ethanol supporters in Congress have proven adept at hiding the total budget costs by adopting a piecemeal strategy. Instead

of one omnibus ethanol bill, they have advanced ethanolrelated legislation on a number of fronts. The Senate alone has acted on seven separate bills pertaining to ethanol, and the subsidies have been extended or authorized several times every few years. With all this activity, one would have expected that Congress had prepared a comprehensive budget estimate of the costs of federal support for biofuels —but ethanol backers have ensured that no such report exists. When all the budget costs of ethanol mandates are added up, it comes out to about $200 per American household. Under pay-as-you-go (Paygo) rules, this money has to come from somewhere, and that means either reducing funds from other programs or raising 3 taxes. Increased taxes to support ethanol production create a curious scenario whereby the American public is taxed for the privilege of paying more for its food and gasoline!

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Splash and Dash
THE ETHANOL SUBSIDY MAKES THE SPLASH AND DASH SCAM POSSIBLE, COSTING AMERICAN TAXPAYERS $600 MILLION THIS YEAR. Rus Thompson June 16, 2008. “ ‘Splash and Dash’ Biofuel Scam Costs Americans Millions, Lawmakers Say.” Albanys Insanity.
When the Clinton administration mandated that every gallon of gasoline would contain 10% deathanol, the oil industry (refiners, distributors, retailers) said that by doing so, the costs of a gallon of gasoline would increase by 65 cents. I suspect that by now, that figure has increased considerably. Plus, that does not take into account the huge subsidy that we also pay to the deathanol producers. Congress has legislated the American public into a surreal world of energy dependence on foreign governments; they have successfully crippled the only partially “free market” economy in the world. And now, the law of “unintended consequences” takes effect with soaring food prices world-wide. Bowing to the “greens” will eventually starve millions to death, thus my name for mandated dependence on ethanol: DEATHANOL. In 2007 this

subsidy cost the American taxpayer $300 million, and it’s projected to cost the American taxpayers $600 million next year,” said Rep. John Shadegg, R-Ariz. The scam — as Shadegg and others call it — is known as “splash and dash.” It stems from an existing $1 subsidy for every gallon of biodiesel fuel blended with regular diesel in the United States. Here’s how it works: Biodiesel is produced abroad using South American sugar cane or Asian palm oil and shipped to the United States, where it’s blended with just a “splash” of regular diesel. A typical tanker-load of about 9 million gallons of biodiesel requires just 9,000 gallons of American diesel to make it qualify for the subsidy. But every gallon in the shipment garners a buck. The ship then makes a “dash” for Europe, where its fuel is sold below market rates. That means each tanker-load that makes the dash nets importers about $9 million dollars in tax credits from the IRS. Lawmakers have estimated its cost to Americans at tens — or even hundreds — of millions each year. Shadegg wants to end “splash and dash” by eliminating the subsidy for any biodiesel exported from the United States, which he says harms energy independence. Shadegg is pushing his bill in the House, which has already passed measures to stop the scam. “Taxpayers should be outraged because they are subsidizing foreign consumers of biodiesel,” said Shadegg. “That is insane, and it’s a ridiculous burden to put on American taxpayers.”

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Splash and Dash
SPLASH AND DASH IS SO BAD THAT PEOPLE THINK EVEN DOMESTICALLY PRODUCED BIOFUELS SHOULDN’T GET TAX CREDITS ANYMORE. Ian Swanson June 19, 2007. “Finance panel set to close ‘splash and dash’ loophole.” The Hill. a loophole that has allowed importers to pocket tens of millions of dollars in subsidies for biodiesel that never finds its way to U.S. gas tanks. Known as “splash and dash,” the loophole allows 100 percent biodiesel made from soybeans and other commodities and imported from a third country, such as Brazil or Malaysia, to be carried to a U.S. port, where a “splash” of petroleum diesel is added. This allows the importer to qualify for tax credits intended to promote the production and use of U.S. biodiesel. The ship then quickly leaves the U.S. port to “dash” to another port, usually in Europe, where the subsidized biofuel is unloaded and sold. Tax incentives have created a hugely profitable market for biofuels in Europe, so the companies pocketing the U.S. tax breaks are again rewarded in Europe. Critics of the approach say the biodiesel tax incentives, first approved by Congress in 2004, were intended to promote the use of renewable fuel in the U.S. Fuels blended in the U.S. but used in other countries should not benefit from the tax breaks, they argue. “Allowing foreign-produced biodiesel to be transshipped through the U.S. market solely to take advantage or our
The Senate Finance Committee today will mark up legislation intended to close biodiesel tax is indefensible,” said Joe Jobe of the National Biodiesel Board, which fully supports efforts to shut down “splash and dash” transactions. Both committee Democrats and Republicans, such as Finance ranking member Chuck Grassley (R-Iowa), were concerned because the credit for blending fuel was meant to encourage biodiesel production in the U.S., a committee aide said. It is estimated that the practice cost the U.S. Treasury $30 million in the last year, but critics say the price will grow as the practice is becoming more common. The loophole has been particularly galling to the European industry, which has lobbied European Union officials to press the U.S. to change its system. In a letter to E.U. Trade Commissioner Peter Mandelson earlier this year, the European Biodiesel Board (EBB) complained that U.S. biodiesel can qualify for the tax breaks by adding only a drop of mineral diesel, even though biodiesel blends are typically as much as 95 percent mineral diesel. The blended fuel “is then ready to be exported to Europe in order to fully benefit from European subsidy schemes,” said the letter, which calls it an unfair trade practice. Lobbyists for E.U. farmers who hope to have their commodities used for the

production of bio-fuels in Europe also have pressed for the change in U.S. policy, since the U.S. produced ethanol is cutting into their home markets. “It’s pushing the price down so it’s hurting the European farmer,” said Ralph
Ichter, who represents French oilseed producers and processors. He said the U.S. tax incentives are not meant to subsidize European motorists. At the same time, Ichter said it is not clear whether European drivers see lower fuel costs because of the U.S. tax breaks, or whether those profits are simply pocketed by the traders in the U.S. Language closing the loophole is tucked away in the Energy Advancement and Investment Act of 2007 unveiled by Finance last Thursday. The provision is one of the smaller revenue raisers included in the bill to pay for various tax incentives for renewable energies. The Finance legislation is set to be incorporated into the energy bill the Senate is debating this week on the floor. Senate approval of the energy bill will turn on the result of a number of debates, from the viability and cost of coal-to-liquid technology to the auto industry’s opposition to the bill’s mandated fuel efficiency standards. Under current law, U.S.

The Senate legislation would change U.S. law so that only biodiesel consumed or sold for consumption in the U.S. would qualify for the subsidy. Foreign-produced fuel would have to be entered in the U.S. for consumption in the U.S. to get the tax credits. The bill would also not allow domestically produced fuel sold for export to qualify for the tax incentive.
biodiesel producers are eligible for a subsidy of $1 per gallon of biodiesel mixed with mineral diesel.

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AT: Can’t solve state policies
State ethanol policies have a very small market impact. Koplow in 07 (Douglas, Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007
update October 2007)

Ten states have some form of a purchase mandate for ethanol or biodiesel (Alternative Fuels and Advanced
Vehicles Data Center, 27 August 2007; Pew Center on Climate Change, 9 August 2007). The cost impacts will vary depending on the region and the specific mandates. In some cases they are expected to trigger incremental price distortions to the federal mandate, effectively creating an additional level of price support. The

U.S. Energy Information Administration estimates that the ethanol mandate in Minnesota (currently 10 percent) has no impact on prices since fuel ethanol is currently competitive; but that the
Hawaiian mandate (85 percent of ethanol must be E10) does drive up prices since both imported ethanol and local feedstock are more expensive than gasoline (EIA, AEO 2007: 24). The MPS subsidy in Hawaii would be above the subsidies the state already provides to ethanol consumption by exempting E10 or higher from the state sales tax on gasoline.

States mandating higher blend ratios than commonly available (Iowa at 25 percent; Minnesota at E20 percent if allowed by regulators by 2013) will also likely induce local price distortions. Mandates focusing only on small market segments, such as a B5 mandate for government and school usage in New Mexico, may drive up operating costs for the related government entities, but are unlikely to affect enough volume to skew market prices.

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AT: Just remove tariff CP
The counterplan massively increases food prices. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels
As the above study illustrates, liberalizing

biofuel trade is likely to increase demand for biofuels by reducing prices in previously protected markets, especially if the subsidies for consumption, mandates, or both are maintained. An immediate effect of trade liberalization would be similar to that of higher biofuel production: an increase in feedstock prices and a drop in by-product prices on the world market. Domestic biofuel prices in those markets that heavily protect domestic producers would fall. More generally, biofuel and agricultural trade liberalization is expected to increase world prices of agricultural commodities. Higher agricultural crop prices would benefit many of the poor engaged in agriculture in developing countries. However, food security in those developing countries that are net food importers would be negatively affected. Prices are expected to rise more steeply for the food products that developing countries import than for the commodities they export. The poorest countries, very few of whom export products on which there are currently high tariffs, would generally be worse off (FAO 2003). Lowering tariffs in developing countries could partially
mitigate these adverse effects by lowering prices of imported food items and by creating opportunities for regional trade.

Removing both the tariff and subsidies is necessary to reduce food prices. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels The first study found that removal of the U.S. import tariffs on ethanol from Brazil would reduce ethanol production in the United States, reduce ethanol consumption in Brazil and increase its consumption in the United States, increase ethanol exports from Brazil to the United States, lower ethanol prices in the United States, and raise world ethanol prices. Predictably, it would also eliminate ethanol trade
between the Caribbean and the United States through the CBI (Elobeid and Tokgoz 2006). In the first scenario, the study assumed that the U.S. government’s domestic biofuel policy would remain in place, including the federal tax credit of US$0.51 per gallon, but that the specific import tariff of US$0.54 per gallon would be eliminated (with all other support measures remaining in place). Between

2006 and 2015, elimination of the tariff results, on average, in an increase of 24 percent in world ethanol prices, an increase of 1.8 percent in world sugar prices, and a decline of 1.5 percent in world maize prices (because less maize in the United States is
diverted to the ethanol market). In the United States, ethanol production declines by 7 percent, but consumption increases by 4 percent. Net imports triple, and domestic ethanol prices fall by 14 percent.

In Brazil, ethanol production increases by 9 percent but domestic consumption falls by 3 percent, and net exports rise by 64 percent. In the second scenario, the study assumed that the federal tax credit of US$0.51 per gallon would be eliminated in addition to the removal of import tariffs. In that case, U.S. consumption of both ethanol and gasoline would fall relative to the base case (which has both the import tariffs and tax credit for ethanol blenders in place). U.S. ethanol prices; world ethanol, sugar, and maize prices; Brazilian ethanol production; and net Brazilian exports of ethanol would all be lower than in the first scenario.

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AT: Just Remove Tariff CP
The counterplan locks in market distortions, must do both policies simultaneously. They don’t solve the bubble advantage. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels Biofuel trade liberalization would increase competition, which should in turn help improve efficiency, bring down costs, and enable the world’s most efficient producers to expand their market share. Removal of high tariffs would bring down prices in highly protected markets and increase consumption. While efficient producers would gain, those developing countries with duty-free access to the EU and U.S. markets today might lose their trading opportunities altogether. On the other hand, removing border barriers to biofuel trade while continuing the agricultural and biofuel policies that distort biofuel markets could prolong and even worsen those distortions, as additional markets for subsidized agricultural outputs and biofuels would be created. These considerations underscore the importance of dealing simultaneously with the full range of trade reforms defined broadly by the WTO. Failing that, trade in ethanol and biodiesel might be liberalized as a first step, which could also force governments to address
openly the question (and the costs) of what objectives their biofuel support policies are actually pursuing.

Have to remove tariffs and the subsidies at the same time. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels
There is one caveat concerning the benefits of reducing and eventually eliminating border barriers. If

biofuels continue to require very large subsidies, lowering their import tariffs may merely serve to enlarge an industry that cannot stand on its own, and make future adjustments even more painful should subsidies be substantially curtailed or withdrawn. Biofuel trade liberalization coupled with continued agricultural and biofuel policies that distort markets for biofuels could prolong and even worsen those distortions, as additional markets for subsidized agricultural outputs and biofuels would be created. The three sets of policies listed on the previous page are closely interwoven, and the theory of second best (Lipsey and Lancaster 1956–57) suggests that it would not necessarily improve overall welfare to address biofuel trade separately from other distortions affecting biofuels and biofuel feedstocks.

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AT PICs of Tax credit or Mandates
The effects of the tax credit or the mandate are not additive. Have to both be removed at once. Harry de Gorter and David R. Just February 2008 Department of Applied Economics and Management Cornell University The Economics of U.S. Ethanol Import Tariffs with a Consumption Blend Mandate and Tax Credit
The bulk of the gains to multilateral trade liberalization will be due the dismantling of agricultural policy distortions (Anderson and Martin 2006; Hertel and Winters 2006). Within agriculture, it is well established that import barriers represent the largest share of market interventions (Hoekman et al. 2004; Anderson et al. 2006). With

the significant increase in oil prices and the adoption of specific biofuel polices, the benefits from trade liberalization in biofuels are likely to be also large. Currently, there is little trade in biofuels mainly because of high tariffs 4 (Howse et al. 2006). he United States has an import tariff on ethanol of 45 percent, lower than biodiesel tariffs and EU tariffs on ethanol (Jank et al. 2007). At the same time, it is widely believed that developing countries have comparative advantage in biofuel production, including Africa (UNCTAD 2006; Kojima et al. 2007). In analyzing the effects of the import tariff, it is however important to understand that countries worldwide have also adopted a number of other policies to encourage the production and use of biofuels as an alternative to fossil fuels (Kojima and Johnson 2006; UNCTAD 2006). Two particularly important policies are biofuel excise-tax exemptions (hereafter “tax credits”) and mandates on biofuel consumption.2 The
focus of this paper is to analyze the impact of an import tariff on ethanol in conjunction with a tax credit and/or ethanol consumption mandate. Because of key policy interaction effects, we show the standard analysis of an import tariff is not adequate. Indeed, the

impacts of a tariff depend not only depend on whether a mandate or tax credit is in place but also if both policies are in place simultaneously (while the tax credit itself affects the likelihood that a mandate is binding). A significant finding is that the benefits to U.S. corn producers from ethanol policies are not additive. In general, the benefits to U.S. ethanol producers of a tax credit with a binding mandate are very small. Likewise, the costs of a tariff to exporters depend on the tax credit and whether or not the mandate is binding.

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AT Reclassify Ethanol as industrial good CP
Classifying ethanol as a industrial good doesn’t solve the case, it takes too long and doesn’t actually reduce market distortions. Masami Kojima of the Oil, Gas, and Mining Policy Division, World Bank; Donald Mitchell of the Development Prospects Group, Development Economics, World Bank; and William A. Ward 2007, Professor and Director, Center for International Trade, Clemson University. 2007 Energy Sector Management Assistance Program Considering Trade Policies for Liquid Biofuels
To increase market access more rapidly, some

have proposed that ethanol be reclassified as an industrial good or an environmental good. The latter is a relatively new concept that is still being formulated, and is unlikely to affect market access for ethanol in the near to medium term. But because this proposal has received some attention, it is covered in some detail in appendix A. The Doha Ministerial Declaration of 2001 specifically refers to environmental goods and services as an area that could be targeted for faster liberalization. The declaration also has a paragraph on the desirability of increasing market access for non-agricultural products, highlighting products of export interest to developing countries—which biofuels could very well be. In practice, reclassification is unlikely to have near-term policy consequences. The WCO Council considers amendments in four-year cycles. The most recently completed review occurred in June 2004, with the amendments implemented on January 1, 2007. Amendments under the next review cycle are not scheduled for implementation until 2012 (Steenblik 2005b). Waiting for reclassification with a view to quickening the pace of liberalization thus does not seem practical in the near term. More importantly, reclassification is not a requirement for liberalizing market access. Being classified as an agricultural product does not bind the good to high tariff rates, nor is reclassification necessary to take a good out of annex 1 of the Agreement on Agriculture (which spells out which products are included under the agreement). However, classifying ethanol as an agricultural good does enable
governments to protect domestic producers longer, and, in the extreme, declare ethanol a sensitive or special product (see appendix A) to shield it further from external pressure for liberalization.

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Cellulosic good
Switch Grass is the best alternative fuel to Corn Ethanol, It isn’t a food crop, and can be farmed on 35 million acres of land unusable for food crops, escaping all of the food price impacts, while being 94% better for the environment in its production and consumption. David Biello, January 8, 2008, Scientific American, http://www.sciam.com/article.cfm?id=grass-makes-betterethanol-than-corn
Midwestern farms prove switchgrass could be the right crop for producing ethanol to replace gasoline GRASS GAS: Turning fields of switchgrass like this one in northeastern Nebraska into ethanol produces 540 percent more energy than the amount consumed growing the native perennial. COURTESY OF USDA-ARS Farmers in Nebraska and the Dakotas brought the U.S. closer to becoming a biofuel economy, planting huge tracts of land for the first time with switchgrass—a native North American perennial grass (Panicum virgatum) that often grows on the borders of cropland naturally—and proving that it can deliver more than five times more energy than it takes to grow it. Working with the U.S. Department of Agriculture (USDA), the farmers tracked the seed used to establish the plant, fertilizer used to boost its growth, fuel used to farm it, overall rainfall and the amount of grass ultimately harvested for five years on fields ranging from seven to 23 acres in size (three to nine hectares). Once established, the fields yielded from 5.2 to 11.1 metric tons of grass bales per hectare, depending on rainfall, says USDA plant scientist Ken Vogel. "It fluctuates with the timing of the precipitation,'' he says. "Switchgrass needs most of its moisture in spring and midsummer. If you get fall rains, it's not going to do that year's crops much good." But yields from a grass that only needs to be planted once would deliver an average of 13.1 megajoules of energy as ethanol for every megajoule of petroleum consumed—in the form of nitrogen fertilizers or diesel for tractors—growing them. "It's a prediction because right now there are no biorefineries built that handle cellulosic material" like that which switchgrass provides, Vogel notes. "We're pretty confident the ethanol yield is pretty close." This means that switchgrass

ethanol delivers 540 percent of the energy used to produce it, compared with just roughly 25 percent more energy returned by corn-based ethanol according to the most optimistic studies. The U.S. Department of Energy (DOE) is
partially funding the construction of six such cellulosic biorefineries, estimated to cost a total of $1.2 billion. The first to be built will be the Range Fuels Biorefinery in Soperton, Ga., which will process wood waste from the timber industry into biofuels and chemicals. The DOE is providing an initial $50 million to start construction. "Cost competitive, energy responsible cellulosic ethanol made from switchgrass or from forestry waste like sawdust and wood chips requires a more complex refining process but it's worth the investment," Energy Secretary Samuel Bodman said at the Range Fuels facility groundbreaking in November. "Cellulosic

ethanol contains more net energy and emits significantly fewer greenhouse gases than ethanol made from corn." In fact, Vogel and his team report this week in Proceedings of the National Academy of Sciences USA that switchgrass will store enough carbon in its relatively permanent root system to offset 94 percent of the greenhouse gases emitted both to cultivate it and from the derived ethanol burned by vehicles. Of course, this estimate also relies on using the leftover parts of the grass itself as fuel for the biorefinery. "The lignin in the plant cell walls can be burned," Vogel says. The use of native prairie grasses is meant to avoid some of the other risks associated with biofuels such as reduced diversity of local animal life and displacing food crops with fuel crops. "This is an energy crop that can be grown on marginal land," Vogel argues, such as the more than 35 million acres (14.2 million hectares) of marginal land that farmers are currently paid not to plant under the terms of USDA's Conservation Reserve Program.

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Cellulosic Good
A switch to grass based ethanol is an alternative that doesn’t displace food crops and saves the gulf of Mexico by eliminating a 8000 mile of dead zone due to nitrogen runoff from corn fertilizer ScienceDaily, Jan. 19, 2008, http://www.sciencedaily.com/releases/2008/01/080116192108.htm
Within five to seven years fast

growing trees and grasses might become economically viable alternatives to corn as a source of renewable fuel ethanol, reducing the need for pollutants that now cause a massive "dead zone" in the Gulf of Mexico. "Ethanol from cellulose, whether from trees or other sources, will be the way to go in the very near future," says Dr. Gopi Podila, a University of Alabama in Huntsville (UAHuntsville) biologist who has been conducting research on high-yield trees for more than a decade. "Trees are cheaper to raise than corn, have a competitive yield and they don’t need as much of the fertilizers that are causing all of the problems in the Gulf. "These trees also offer the U.S. a realistic option for producing enough
renewable energy to make a meaningful dent in fossil fuel imports." Due to the rising demand for ethanol, farmers in the U.S. planted more corn this year than in any

corn crop is fertilized with millions of pounds of nitrogen-based fertilizer. An estimated 210 million pounds of those nitrates are not absorbed by the corn, run off into streams and rivers, and are carried to the Gulf of Mexico each year, where it causes a massive "bloom" of algae. When the algae dies it sinks to the bottom, where it absorbs oxygen as it decays. In recent years that oxygen depletion has created an aquatic "dead zone" covering about 8,000 square miles in which shrimp, fish, oysters and crabs cannot survive. Growing highyield trees might have several economic and environmental advantages over corn, said Podila, who chairs UAH's
year since World War II. The Biological Sciences Department. "For one thing, there are some trees like poplar and aspen, where you could get a harvest every five or six years but you would only have to plant once every 30 to 40 years because they grow back from the roots. That is a significant cost savings, if only for the fuel used for planting and harvesting every year. "Many

of these trees and grasses like switchgrass will grow on land that might have marginal value for farming. Maybe it is too steep for planting or too dry for farming, but that wouldn't be as much of a problem for trees. You could have an extra crop growing on land that isn't presently productive. There are vast areas of marginal land in the U.S. that could be used for this purpose without having an impact on other crops."

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AT: Butanol solves the aff
Butanol is not a viable alternative to ethanol Scott Sklar, September 12, 2006 (President of The Stella Group in Washington, DC, a distributed energy marketing and policy firm. Scott, co-author of "A Consumer Guide to Solar Energy,") http://www.renewableenergyworld.com/rea/news/ate/story?id=45946 There has been little to no effort to promote butanol as an alternate fuel because of historically low yields and low concentrations of butanol compared to those of ethanol; that is, for each bushel of corn you would garner (1.3) gallons of butanol (0.7) gallons of acetone and (0.13) gallons of ethanol with concentrations of 1-2%. Butanol is presently manufactured from petroleum. Historically (early 1900s - 1950s) it was manufactured from corn and molasses in a
fermentation process that also produced acetone and ethanol known as an ABE (acetone, butanol, ethanol) fermentation. However, as demand for butanol increased, production by fermentation declined mainly because the price of petroleum dropped below that of sugar when the U.S. lost its low-cost supply from Cuba around 1954.

If you compared ABE yield to that of the yeast ethanol fermentation process, the yeast process yields 2.5 gallons of ethanol from a bushel of corn; with concentrations of 10-15% it becomes very clear why ethanol is considered a better alternative fuel source over butanol.

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