Short Term vs. Long Term vision - A Green Intent, Not!

This is from a colleague of mine, Arturo Gamboa who writes here, an example of efforts not taking into account the outcomes and ramifications of a seemingly good intent. Certainly made me chuckle.

Lack of vision can really screw up things. Here is an example of a slow-motion train wreck.

Recent news indicates that the price of vegetable oil for human consumption had doubled in price and this is having consequences to the price of food worldwide. Why is this happening?

This was due because of the alternative energy initiatives pushed by the current US administration to use biofuels to complement the use of hydrocarbons to support the US and world-energy needs. Since the US is encouraging biofuels at home at abroad, the price of plant commodities that can be used to generate biofuels has skyrocketed. Take corn for example, where the increase in price helps the mid-west farmers and reduces the federal expenditures on farm subsidies. This also helps countries with agricultural economies (most of them poor) creating new sources of revenue. A win-win situation, right?

Let’s take a longer view look. One of the consequences of the diversion of corn to the Energy industry is the increase we are experiencing in price of foodstuffs since the food industry is highly dependency on corn for human (corn syrup) and animal consumption which raises has risen the price of animal products and processed foods (look at the pervasive use of corn syrup)

Since the percent of disposable income spent by an average household in food is low in the US, the increase in food prices has not created alarm with consumers (at least not yet). However if one looks at those countries where the biofuel revolution is shifting agriculture production from food to energy, the percent of income spent on food is large and the increases in food prices will have a deleterious effect on the population. In effect, creating a paradox of countries with improved economies (short-term) with populations suffering hunger and disease (long-term) that may negate the increased revenues.

Why should the US care? All is well short-term (temporally and geographically)

One could look at an altruistic perspective but from the pragmatic point of view the US should look at history and see how countries suffering hunger can be easily destabilized and be fertile ground for terrorism affecting national policies and budgets in the long-term. In addition the growing need for biofuels by the industrialized countries will foster mono-cultivation and use of forest land for biofuels. This if gone unchecked will create a severe ecological imbalance (again no problem short-term for the US), but in the end ecology has no boundaries and our children will all suffer the consequences of short-term decisions.

Focusing on more of the same on Energy policy leads to short-term advantages with large downside long-term. It is necessary to think out-of-the-box to alternatives that will lead to a more sustainable model which delivers a win-win situation for all players in the short and long term. Author: Arturo Gamboa.