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January 01 2014


Daily demand and supply

One of my New Year's resolutions is to be a better blogger (don't we all resolve that every year?). For example, not to post anything on old news. Ah, well, resolutions are made to be broken. Here is an old story as I'm have an hour to catch up from the holiday break before I take another break:

American farmers have prospered during a three-year boom in corn and cropland prices. As values have soared since 2011, farmers bought more acres and upgraded their harvesters to produce a record corn crop of almost 14 billion bushels in 2013. ...

Now, as corn prices start to decline, bankers and agricultural economists are predicting a slowdown in farmland prices that could turn into a bust. ...

U.S. farmers, whose earnings grew an average 6 percent in 2013, face several challenges: a likely reduction in corn exports to China after a record year; greater competition from other nations; moves in the U.S. and the European Union to limit the use of ethanol, a biofuel made from corn; and a possible record production of the crop in 2014.

Kohl said a plunge in land prices would strip value from farms and put over-leveraged farmers out of business. Farmland prices are up 72 percent to about $8,000 an acre in the last three years, according to data from the U.S. Department of Agriculture. In Iowa, the largest producer of corn, the gain was 90 percent, according to the Iowa State University in Ames.

via www.newsobserver.com

The third paragraph is going to be a little confusing for anyone who doesn't obsess about this stuff. First, why would corn exports fall after a record year? Some demand condition isn't being described. But this isn't a challenge, unless farmers treated a temporary demand increase like a permanent one and borrowed too much money. Second, why would "record production of the crop in 2014" be a problem in 2014? It might be that the demand for corn is inelastic so that a big increase in supply leads to a smaller increase in quantity demanded (in percentage terms) and revenues will fall (or it might just be bad writing).  

December 02 2013


A nutty demand and supply example

Groan, I know, but use this one if you are tired of those Florida freeze examples:

A rare collision of ill-timed rain, marauding animals and a growing love affair between the Chinese middle class and the pecan has resulted in the worst pecan supply in recent memory. As a result, grocery store prices are up by about 30 percent ....

In 2012, the nation’s pecan orchards produced about 302 million pounds of pecans. This year, that number could drop by as much as 35 percent, according to industry officials. In Georgia, the nation’s leading pecan-producing state, the crop is expected to be about half of what it was last year. In South Carolina, some orchards succumbed completely.

The problem began with record rainfall last spring and summer. Pollination became difficult, and the moisture encouraged disease. Pecan growers sprayed their fields in record amounts, but it was not enough to fight off a disease called scab.

In Texas and Oklahoma, it was a summer drought that hurt the trees. Then came autumn’s heavy rain, which made the ground too wet to hold the heavy equipment that shakes nuts from trees and sweeps them up.

As a result, harvesting was sporadic, and the pecan supply was left wide open for feral pigs, which have become quite a problem in Texas, and for squirrels, which are always looking for a free nut. ...

The bad nut crop has a few other causes, one of which is the cyclical nature of pecans: Typically, if one year is good, the next year is not.

Last year, for example, Texas produced about 65 million pounds of pecans, said Larry Stein, a professor of horticulture at Texas A&M University. Most estimates indicate that this year will bring no more than 35 million pounds. ...

In the mid-2000s, the market for pecans in China began to grow rapidly. China now consumes more than a third of the American pecan crop, a development that followed the country’s inclusion in the World Trade Organization in 2001.

via mobile.nytimes.com

Scab, feral pigs, squirrels, China, Boo Radley? Could micro principles get any more interesting?

Sponsored post

November 13 2013


Q: What do you get when you cross environmentalists with Tea Partiers?*

A: Common ground on the bad environmental economics of the ethanol mandate.

The summary:

This week, the EPA is expected to announce changes to the ethanol mandate, a 2007 law that requires energy companies to mix billions of gallons of ethanol into gasoline and diesel fuels. After six years in the mix, corn-based ethanol has lost its popularity, and a diverse group of critics is calling for the law's repeal.

Why are environmentalists in favor of a rollback/repeal?

Though ethanol fuel releases less carbon dioxide than other kinds of gas, many question if the side effects of production are worth it...Growing corn requires fertilizer, which requires natural gas to make. Fertilizer also has contaminated rivers and drinking water, says the report. And ethanol factories usually burn coal or gas, which dumps carbon dioxide into the atmosphere.

Why are Tea Partiers in favor of a rollback/repeal?

Other opponents complain the mandate — like any energy subsidy — is free market poison, claiming it "distorts fuel markets and will raise gasoline prices, especially as the increased blending requirements collide with declining demand for gasoline," reports Politico.

Strange bedfellows indeed.

And who is in favor of keeping the mandate?

Meanwhile, the ethanol industry is asking the AP to retract the story. “At best, the AP article is lazy journalism, but at worst, it appears purposefully designed to damage the ethanol industry,” American Coalition for Ethanol Executive Vice President Brian Jennings said in a statement to the press. “There was an incredibly reckless disregard for the truth in the handiwork of this hit-piece.”

And who is the American Coalition for Ethanol?

ACE is a non-profit, membership-based organization with about 1,500 members including:

  • ethanol producers
  • farmers
  • investors
  • the agriculture community
  • industry suppliers
  • rural electric cooperatives
  • others supportive of ethanol.


*Partial credit if you answered 'Tim'

November 05 2013


14 Steps to Reduce Black Carbon and Stabilize the Cryosphere

on_thin_iceClimate change is causing unprecedented changes in the Earth’s regions of snow and ice, portents of profound, dramatic change for ecosystems and societies around the world, according to a joint report released by The World Bank and The International Cryosphere Climate Initiative (ICCI) November 4.

The Earth’s cryosphere is warming more rapidly than anticipated – “at a pace unprecedentd in the historic record.” Rather than abating, in most cases warming and melting is accelerating, posing ecosystems and societies around the world with a variety of fundamental threats, including an increasing frequency of droughts and floods, and dramatic shifts in water, food and energy resource availability, according to “On Thin Ice: How Cutting Pollution Can Slow Warming and Save Lives.”

The Earth’s cryosphere: “On Thin Ice”

Stabilizing and preserving the cryosphere merits inclusion as a global imperative, the report authors stress. Leadership – in the form of explicit and sustained guidance, direction, support and incentives – is needed across markets, industries, the government, private and public sectors if there is any chance of this objective being realized, however.

In “On Thin Ice,” the World Bank and ICCI report authors lay out 14 practical measures that if enacted by 2030 could drastically reduce short-lived carbon pollutants (SLCPs) – primarily black carbon and methane – and stabilize conditions in the world’s threatened snow and ice-bound regions. Doing so, they assert, would bring “multiple health, crop, and ecosystems benefits and decrease risks to development from water resource changes, including flooding and other major impacts or climate feedbacks we may not foresee today.”

The effects of climate change are being seen and felt disproportionately in the Earth’s cryosphere, whether it’s Arctic sea ice, Antarctic ice shelves, the Greenland ice sheet, the Alaskan coast or the freshwater glaciers of the Andes, Rockies and Himalayas. Moreover, “rapid changes in the cryosphere observed during the first decade of this century are continuing or accelerating,” according to the report.

“Warming in the cryosphere poses serious threats to disaster preparedness, to water resources in some heavily populated regions, and to adaptation and ecosystems preservation. Intensified monitoring in cryosphere regions is needed to provide better and earlier warning of changes.”

Ongoing warming “has the potential to trigger disastrous feedback mechanisms from the cryosphere into the global climate systems,” the report authors continue, including “loss of albedo from sea ice and snow cover and loss of permafrost leading to greater carbon fluxes into the atmosphere (particularly where emissions occur as methane.”


Credit: “On Thin Ice,” World Bank, ICCI

Methane emissions from thawing permafrost alone could increase atmospheric carbon “as much as 5-30% by the end of this century if current cryosphere warming is not slowed,” they warn.

Reducing Black Carbon and methane emissions

Implementing the 14 measures recommended in the report by 2030 “could slow warming in the Arctic by more than a full degree by 2050, resulting in up to 40 percent reduced loss of summer sea ice and 25 percent reduced loss of springtime snow cover compared to the baseline,” however.

As stated in the report’s executive summary,

“Accelerating actions to decrease short-lived pollutants from key sectors can make a real difference by slowing these dangerous changes and risks to development while improving public health and food security.”

Rapidly scaling up just four cleaner cooking solutions alone could save as many as 1 million human lives a year. Reducing diesel emissions in transportation can prevent 340,000 deaths Achieving a 50% reduction in open field and forest burning could avoid 190,000 deaths from air pollution, according to the report.


Source: “On Thin Ice,” World Bank, ICCI

There’s no time to waste, they emphasize. “With projections of large cryosphere impacts such as Arctic sea ice loss occurring by mid-century, speed is of the essence in addressing and operationalizing these cryosphere and development challenges.”

Of potentially profound significance for coastal regions and populations, “rates of sea-level rise might be significantly slowed by 2050, with a potential near-leveling-off in rates before the end of the century if SLCP measures are combined with CO2 emissions held to 450ppm.

“This decrease in sea-level rise could range from 10 cm to half a meter or more. Perhaps more important, temperature reductions in polar regions from these measures would help minimize the risk of essentially irreversible ice sheet loss or disintegration in West Antarctica and Greenland, which could ultimately raise ocean levels by several decimeters by 2100—and by many meters over a period of centuries or millennia.”

The post 14 Steps to Reduce Black Carbon and Stabilize the Cryosphere appeared first on Global Warming is Real.

September 19 2013


The Vital Role of Forests: Carbon, Rain and Food

Forests provide ecosystem services vital to all lifeWe are coming to a better understanding of the vital role that forests play in the general health of planetary ecosystems.  However, alongside our burgeoning awareness, we are also destroying forests in our quest for more land and lumber.

Deforestation is eliminating the Earth’s forests on a massive scale. Each day at least 80,000 acres (32,300 ha) of forest disappear and another 80,000 acres (32,300 ha) of forest are degraded. Overall, FAO estimates that 10.4 million hectares of tropical forest were permanently destroyed each year in the period from 2000 to 2005. About an acre of tropical rainforests are lost every second. If the current trend continues, the world’s rainforests could completely vanish in a hundred years

Forests are being destroyed largely for agricultural purposes and logging. Forests are also cut down as a result of growing urban sprawl. Deforestation results in habitat loss for millions of species that depend on them for their survival. Deforestation undermines the water cycle which can lead to desertification.

Deforestation also drives climate change as trees play a critical role in absorbing or sequestering the greenhouse gases that fuel global warming. The clearing and burning of rainforests are responsible for approximately 15 percent of global carbon emissions. In the U.S., forests absorb 13 percent of total greenhouse gas emissions each year. Based on the most recent satellite data, emissions from deforestation account for 10 percent of global carbon emissions. However, a January 2013 study just out of Dartmouth College shows that deforestation impacts on soil and may release even more carbon than previously thought.

Forest management policy

Wealthy countries have promised to help poorer nations to protect their forests through programs like The Natural Capital Project, The Economics of Ecosystems and Biodiversity (TEEB) and The Partnership for Wealth Accounting and the Valuation of Ecosystem services (WAVES). While the developed world has pledged more than 5 billion dollars for this purpose, the money promised has not lived up to these promises.

One recent example involves the country of Ecuador, which has started cutting down its forests for oil drilling operations after the international community failed to provide necessary funding. Conversely, Costa Rica is one of the best examples of successful forest management. The country has managed to double the size of its tropical forests in the last 20 years through national conservation policies. As reported in the journal Environmental Research Letters, Costa Rica’s ban on clearing of mature forests appears to be a key success factor in encouraging agricultural expansion on non-forest lands.

Success in managing forests requires a sound economic plan in support of conservation. There are a number of steps governments can take to help with reduce deforestation including tax breaks, direct payments, and subsidies.

Water and hydro-electric companies can also charge customers through fees embedded in utility bills in order to generate income to pay forest managers. Governments can also legislate financial mechanisms that value natural resources like trees. Under such a scheme, companies are forced to pay for the pollution they generate.

Setting a mandatory carbon price may be the best way to protect forests as market driven programs seem to offer the best approach. Another approach involves projects like the Forest Footprint Disclosure (FFD) which is working with companies on their impact on forests. Initiated in 2008, this is a not-for-profit project of the Global Canopy Foundation that is backed by investors.

A more workable solution is to carefully manage forest resources by eliminating clear-cutting to make sure that forest environments remain intact. The cutting that does occur should be balanced by the planting of enough young trees to replace the older ones felled in any given forest. The number of new tree plantations is growing each year, but their total still equals a tiny fraction of the Earth’s forested land.


International efforts to curb deforestation are centered on a United Nations-backed scheme called Reducing Emissions from Deforestation and Forest Degradation (REDD). REDD+, emerged from the 2009 climate talks in Copenhagen, was developed to provide financial incentives to countries and landowners to protect and better manage forests.

Forests are not a renewable source of electricity

One of the most troubling trends involves the use of forests as fodder for energy production. To meet this growing demand, U.S. companies have become the world’s largest exporter of wood pellets in 2012. What makes this even worse is that this is being sold as a renewable form of energy production.

As explored by the NRDC, burning our forests is bad for our climate, bad for local ecosystems, and bad for our communities.  In response to this troubling trend, the NRDC and Dogwood Alliance launched a program to protect Southern trees called Our Forests Aren’t Fuel. This campaign is designed to raise awareness about the alarming and rapidly-growing practice of logging forests and burning the trees as fuel to generate electricity.

Carbon forestry

Supporting reforestration to offset carbon emissions is increasingly popular. This is done through the purchase of carbon credits that are linked with the forestry sector with the idea that these new trees will sequester carbon from the atmosphere.

As reviewed in Ecologist, a report by the monitoring and analysis agency Ecosystem Marketplace indicates that over 30 million metric tonnes of carbon dioxide equivalent (CO2e) was contracted across forest markets in 2010.

Carbon forests can offer a variety of benefits for the environment, however, there is considerable doubt as to whether these planted forests enhance biodiversity. There is also growing support for research that suggests that planted forests may not be as effective as natural forests in inducing rainfall.

Forests are essential to rain

While the relationship between forests and carbon has received a lot of attention, research suggests that forests may also be the driving force behind precipitation which is so vital to overall ecosystem health. As explored in an article in Mongabay, forests may be the key to rainfall and as a consequence, global ecological restoration.

On September 12, 2013, the U.S. Forest Service published a final rule that is expected to improve the agency’s ability to restore land. “This rule will help us improve the resiliency, health and diversity of our forests and grasslands,” said U.S. Forest Service Chief Tom Tidwell. “We will now be able to move forward with our partners to focus more energy on action, and less on paperwork, to restore more acres in less time.”

The final rule includes reference to a paper titled “Where do winds come from?” This paper outlines a new meteorological hypothesis in which condensation, not temperature, drives winds. This paper highlights the importance of the world’s forests as the salient driver of precipitation from the coast into a continent’s interior. The theory, known as the biotic pump, was first developed in 2006 by two Russian scientists

This research explains why deforestation also brings a drop in precipitation. The condensation produced by forests creates zones of low pressure that suck in the air from the surrounding regions. Forests create persistent low pressure zones on land and this causes moist winds to blow from the ocean to land.

The theory put forth in this paper explains why there is so little rain in deserts and further posits that if we were to plant enough trees in these zones we could induce rainfall.

The paper’s authors, Victor orshkov and Anastassia Makarieva, explain that, “Preserving and recovering forest cover may prove to be the cheapest and most reliable means of ensuring regional environmental sustainability.” They also indicate that their research on biotic pumps suggests that industrial plantations do not move rain as effectively as natural forests.

One of the chief findings in this research involves the relationship between forests and agriculture. Put simply, the more forests we lose, the less rain will reach continental interiors.

Forests and agriculture

The relationship between forests and agriculture was also addressed in May at the International Conference on Forests for Food Security and Nutrition. At this conference, scientists and leaders from around the world largely agreed that forests are essenatial to sustainable food supplies. They concluded that forests contribute to food security including the provision of ecosystem services like the regulation of water flow, and the protection of soils against erosion.

The relationship between forests and agriculture is a tragically ironic vicious cycle. We destroy forests to make more room for agriculture, while deforestation appears to undermine agricultural productivity.  We then need more land to produce crops to make up for the reduced productivity.

The issues associated with food supplies will become even more important as we strive to meet the challenge of feeding an ever expanding population. A growing body of research indicates that forests are essential to agricultural productivity.

Forests are far more than an important source of carbon sequestration, they are essential to the water and food on which all life depends.
Richard Matthews is a consultant, eco-entrepreneur, green investor and author of numerous articles on sustainable positioning, eco-economics and enviro-politics. He is the owner of The Green Market Oracle, a leading sustainable business site and one of the Web’s most comprehensive resources on the business of the environment. Find The Green Market on Facebook and follow The Green Market’s twitter feed.

Image credit: CIFOR, courtesy flickr

The post The Vital Role of Forests: Carbon, Rain and Food appeared first on Global Warming is Real.


Netafim Winds Stockholm Industry Water Award

Netafim wins Stockholm Industry Water Award  Israeli-based irrigation company Netafim was presented with the Stockholm Industry Water Award at World Water Week earlier this month. Netafim specializes in “smart drip” and micro-irrigation solutions targeted specifically for small and family-owned farms.

In the mid-1960′s water engineer and Netafim founder Simcha Blass discovered the effectiveness of slow and steady drip irrigation for enhanced plant growth. Building on this realization Blass invented a drip-based tube for highly efficient delivery of water to plants.

Since that time Blass’ drip irrigation tube and the company it spawned has revolutionized sustainable agriculture. Netafim now operates in over 110 countries throughout the world.

Agriculture accounts for 70 percent of freshwater use, in some regions of the developing world that still rely on flood irrigation water use intensity is as high as 90 percent.

The Stockholm International Water Institute selected Netafim for the 2013 award for its groundbreaking innovation in smart drip and micro-irrigation products specifically for farms lacking access to large, expensive irrigation systems, especially those in the developing world. Without these drip irrigation systems, many small farmers are forced to rely on highly inefficient flood irrigation to water their crops, creating inefficiencies in both water use and plant growth.

“Grow more with less”

In a world of increasingly constrained water resources, finding a means irrigating crops more efficiently is essential for meeting the needs a growing  world population.

…with rapidly expanding demand for agricultural products there is a dire need to improve water productivity. Netafim’s remarkable achievements, helping farmers across the world to ‘grow more with less’, are directly contributing to a more water and food secure world,” said the Stockholm Industry Water Award Committee in its  award citation.

“We are turly honored to receive the award,” said Netfim CEO Igal Aisenberg:

“With water and land scarcity topping the list of today’s major global challenges, we’re leveraging our expertise and experience in drip technology to help combat food price inflation, ensure food security and achieve water sustainability,” Aisenberg said in a statement. “This prestigious aware is testimony to our efforts, inspiring us to continue to help reduce water usage and make the world a better, more sustainable place.”

Main image credit: Gardening in a Minute, courtesy flickr

The post Netafim Winds Stockholm Industry Water Award appeared first on Global Warming is Real.

September 12 2013


Land Use and the American Diet

Nobel Prize winning economist* and colleague of mine, Brent Sohngen, wrote the following for his undergraduate class in "Food, Population and the Environment":

Recent high prices for energy and food leave many concerned that we are pushing the limits of the earth's system with too many people and too much consumption. One example of our over-indulgence is meat eating.  Estimates vary, but in general, a cow has to eat 12 calories of food for us to get one calorie of edible meat.  Surely we would use less land and be better off if we just ate less red meat, right?

Let's look more carefully at this question. Just how much land does our meat eating use?  Beef is intensive, and the typical American's annual beef intake is 58 pounds.  It takes about 2400 square feet of cropland to produce that beef, or the size of the average house.  As a whole, we use about 6% of our cropland to grow our annual beef intake.

Other sources of meat are more efficient than beef.  It takes 2 calories of input for a calorie of pork, and 4 calories of input for a calorie of chicken.  This translates into 400-600 square feet of land, or an area of land about the size of our living rooms, for us to eat the equivalent number of calories as 58 pounds of beef. If we want to use soybeans, tofu, other kinds of beans, or tree nuts like almonds instead, we would use up more land than if we were to get the same number of calories from pigs and chickens. 

Well, if we are not using that much land now, aren't we constantly using more land, and consuming more food? One economic "certainty" from the past is that the wealthier people are, the more meat they eat.  In the US, meat consumption grew substantially after World War II as per capita income rose, and the middle class grew.  People in other parts of the world are less wealthy than we are, and they eat far less meat right now. As their incomes rise, they will consume more meat.

The food reality here in America, though, is not one of endlessly increasing consumption.  Over the past 30 years, our diet has actually become a lot less land consuming. Actually, it's pretty amazing what we have done.  Based on our typical diet today, we eat the equivalent of about half an acre each year.  Back in 1980 we used two-thirds of an acre, or about 35% more land per person, for our food consumption.  How have we managed to economize like this? 

First, we seem to have turned the corner on overall food consumption.  Between 1980 and 2004 per person food consumption in the US rose by 0.6% per year, but it has fallen ever since.  This recent reduction probably results from higher real food prices, but it may also have to do with the influence of our national dialogue on obesity.  Second, we've changed our diet by consuming more poultry and tree nuts, and less beef.  We have traded off more land consuming foods for less land consuming foods.

Third, we have dramatically increased the productivity of our agriculture.  Food production in the US, as measured by cereal yields, has increased by 1.6% per year since 1980.  About half of the reduction in land needed for our consumption is due to a change in our diet, and the other half is due to an improvement in land productivity.

We are 38% richer in real terms, and population has grown by 36% since 1980, but today we only need 145 million acres to feed ourselves, down from 147 million in 1980. We nevertheless still use about 335 million acres of productive cropland, and an additional 700 million acres of less productive land. The excess food we produce is exported or turned into ethanol.

Eating less meat will not necessarily cause us to use less farmland – exports and ethanol are just too lucrative. But eating less meat, when combined with productivity improvements, does help us use the land we have more effectively.  Given a rising global middle class in Latin America and Asia that will demand more food and meat, this will be a good lesson for other countries to learn.

*Along with J Shogren and 2,000 of their closest friends, Brent was on the IPCC which shared the 2007 Nobel Peace Prize with Al Gore.

August 26 2013


Ashhole update

I wonder if any NC State economists think this one is exaggerated?

Several dead or dying ash trees dot lawns along Canterbury Road, but only one has drawn the attention of Upper Arlington city arborists.

Last week, Jim Lekoy and Scott Conover pointed to a dead limb in one backyard that hangs over a set of power lines.

The city has ordered the homeowner to remove the tree before the limb snaps and falls on the lines.

“They want to take it down in September,” Lekoy said. “We’re here to see if it will last that long.”

Such visits have become more frequent as the emerald ash borer spreads through central Ohio, where it is expected to kill nearly every mature ash tree by 2018.


Ash borers were first discovered in 2002 near Detroit, where they likely had hitched a ride in wooden packing crates shipped from China. A minor pest in Asia where ashes are more resistant to borers, the insects have proved deadly to North American ashes. Borer larvae eat the soft wood under the bark, cutting off water and nutrients in the trees.

via www.dispatch.com

August 14 2013



From the Wayward Seed Farm website:

At Wayward Seed, we strive to be an example of Ohio at its best. We're passionate about selecting the vegetable varieties that not only promote Ohio's farming heritage, but bring the very best flavor to your table.

From the Columbus Dispatch:

Union County authorities raided a property last night belonging to Wayward Seed Farm — a significant player in central Ohio farmers’ markets and the organic farm-to-table movement — and confiscated more than a half-million dollars worth of marijuana plants.

*Distance from my house: 10.3 miles.

July 18 2013


Congress Submits to Monsanto as Consumers Start Growing Their Own Food

Monsanto gets its way in Congress, but consumer are pushing backBy Ellen Henderson

Monsanto’s website declares that the company could not exist without farmers. The public, however, is no longer buying the rhetoric the company has pushed since its founding in 1901.

Monsanto has sued small family farmers, taken small dairy farmers to court, pushed cotton farmers into bankruptcy, and coerced taxpayers into funding their efforts to poison the world with their genetically modified products.

On May 25, millions of people took to the streets, chanting things like “stop poisoning the people.” Dubbed, the “March Against Monsanto,” the protests were largely ignored by mainstream media.

HR 933, known as the “Monsanto Protection Act” to opponents, easily passed through Congress and was signed into law by President Obama in March. Officially called the Farmer Assurance Provision, the Act forbids federal courts from stopping the sale or use of GMO seeds regardless of any health risks that may be discovered in the future. Though research is revealing the potential dangers of GMO food, the International Business Times says the Monsanto Protection Act gives the corporation immunity from any sort of liability.

Senator Bernie Sanders, I-Vt., has been a vocal critic of the act, which he says forces Americans to eat GMOs whether they want to or not. Vermont is one of few states that have passed a bill requiring food manufacturers to label GMO ingredients. Sanders proposed an amendment to the federal bill that would require all states to have similar labeling laws. The presence of the powerful GMO lobby, which has a lot of influence on Congress, helped reject the proposal in the Senate.  Even at the state level, particularly California, big names in the food industry like Pepsi, ConAgra and Smuckers are fighting against similar labeling proposals.

Disillusioned by the government and lacking the financial resources to fight such massive multinational organizations, many citizens are gathering gardening tools and aquaponics equipment to cultivate their own food. Urban farmers are growing their own fruits and vegetables, with some also producing their own meat, eggs, and honey.

Consumers not only save money by cultivating their own food, but also protect the health of their families. Hydroponic gardening, composting, fish farming and other simple, yet revolutionary ideas present people the opportunity to sustain their families without using a lot of space. The number of people with hunting licenses and permits has increased by nearly 2 million since 2010, according to the U.S. Fish and Wildlife Service. A hunting license and an accurate shot can fill your freezer with meat for the winter, while a Michigan boaters license and a small paddle boat are all you need to find GMO-free fish.

Reaction since the Monsanto Protection Act was passed indicate that consumers aren’t quietly succumbing to the GMO giant. Whether they are lobbying their senators, weeding their backyard gardens by hand or just sitting by the stream hoping for a bite, its clear consumers want safe, GMO-free food with clear labels.


Ellen is a mom and DIY maven. She writes primarily about health, wellness and sustainable living issues.

The post Congress Submits to Monsanto as Consumers Start Growing Their Own Food appeared first on Global Warming is Real.

July 17 2013


Mr. Webb must have never lived in an apartment with other male graduate students*

This excerpt contains the quote of the day:

Industrial-scale hog farming has been a contentious issue in Eastern North Carolina for decades. In 1997, amid uproar about environmental problems in hog farming, the state slapped a temporary moratorium on new or expanded hog farms that used what is known as the lagoon-and-spray-field method. It’s simple and relatively inexpensive, yet odorous and pollution prone: Waste is flushed from hog barns into open-air lagoons, and the effluent is sprayed on fields.

In 2000, Attorney General Mike Easley negotiated the landmark Smithfield Agreement with the state’s main pork producers in which the company agreed to concessions including paying $50 million over 25 years for environmental projects. They also funded a $17.1 million research quest for a new method of treating hog waste.

Yet in 2013, virtually all North Carolina hog farms still use the same method.

[Don] Webb, a former hog farmer himself, owns a fishing camp – a string of small lakes where members fish for bass, brim and crappie – near Stantonsburg in Wilson County.

Webb said Stantonsburg recently spent millions on a sewer system for its 800 residents. But a farm with 3,400 hogs, which might produce the equivalent waste of 10,000 people, is allowed to store its sewage in ponds and spray the contents on fields.

“They need to keep their stench on their own land,” Webb said. “A good American would never stink up another American’s home with feces and urine.”

Another complainant is Elsie Herring of Wallace, who lives on a family plot her grandfather bought 99 years ago. Next door is a hog farm with two hog houses and a lagoon. The farmers spray the hog waste on fields next to the Herrings’ property.

“Sometime it comes over like it’s raining on us,” Herring said. “It holds us prisoner in our own home. It has changed our life entirely.”

via www.newsobserver.com

Here is the abstract from the seminal pig poop paper (PPP):

A hedonic study of rural residential house sales in southeastern North Carolina was conducted to determine the effect of large-scale hog operations on surrounding property values. An index of hog manure production at different distances from the houses was developed. It was found that proximity caused a statistically significant reduction in house prices of up to 9 percent depending on the number of hogs and their distance from the house. The effect on the price of a house from opening a new operation depended on the number of hogs already in the area.

*Note: Either that, or male graduate students are not good Americans.

July 11 2013


If both Republicans and Democrats hate the idea, splitting the Farm Bill must be a good thing

I'm risking biting a hand that partially feeds me with this post:

Bruised from the defeat of a massive farm bill last month, Republicans are giving the legislation another chance by bringing a pared-down version to the House floor.

GOP leaders were still counting how many votes they could muster for the new measure, which drops the politically sensitive food stamp portion of the bill, when they released the legislation late Wednesday. The White House swiftly issued a veto threat, and House Democrats reacted angrily to the last-minute move. A vote is expected Thursday.

The dropped section would have made a 3 percent cut to the $80 billion-a-year food stamp program. Many Republicans say that isn't enough since the program's cost has doubled in the last five years. Democrats have opposed any cuts.

The White House said food stamps should not be left out of the bill. The Obama administration had also threatened to veto the original bill, saying it did not include enough reductions to farm subsidies and the food stamp cuts were too severe.

Republicans are proposing a measure containing only farm programs, with a food stamp bill to come at a later date. Farm groups, anti-hunger groups and conservative groups have all opposed the idea, for different reasons.

via hosted.ap.org

I have often stated (in private of course) that food stamps and farm provisions of the farm bill should be separate pieces of legislation.   The food stamp program is an equity program designed to redistribute income from those who have to those who don't.  It has little to do with efficiency of markets. I'm not saying that's a bad thing, but it is difficult to design an effective program when it is paired with legislation that is supposedly aimed at improving market efficiency.

The farm provisions are a highly bastardized attempt to deal with market failures in agriculture. About the only farm provision left in the Farm Bill that is even partially defensible on efficiency grounds is subsidized crop insurance designed to help alleviate systemic regional risks (like drought).  Private insurers have trouble staying afloat in the presence of systemic risk, and actuarily fair pricing would be prohibitively expensive for many farmers. Beyond that, many of the farm provisions in the farm bill bear little resemblance to efficiency improving market policies and we would all benefit from an examination of the provisions independent from food stamps.  If that happens (and that's a big if) I'm not sure Republicans (or farmers) would like the outcome. 

Now I will sit and wait for my boss' phone call...


July 08 2013


Enviro News Wrap: Farm Bill Foibles; Oil Theft in Nigeria; Expected Opposition to Obama Climate Plan, and more…

The Latest Environmental News HeadlinesGlobalWarmingisReal contributor Anders Hellum-Alexander wraps-up and comments on the climate and environmental news headlines for the past week:

  • Charles Krauthammer Washington Post op-ed belies his understanding of climate science and misrepresents Obama’s climate plan. The whole article is misleading and riddled with pseudo-scientific arguments.
  • Obama has started his environmental campaign with 3 years left in office. A necessary focus of his campaign is coal which is drawing strong opposition from such a wealthy interest group. But, he does not need their re-election money so whine they will while Obama tries to reduce the environmental impact of such a dirty industry. While the coal industry will use its puppets to spread the fear-based propaganda that the economy will crumble from this much-needed regulation, environmentalists are slowly winning this fight.
  • In Nigeria 10 percent of the oil is stolen from pipelines to be sold on the black market. This has created a dirty illegal industry of poor polluters. This is the real affect of “dirty energy,” oil is always being stolen, spilled and regular people feel the consequences. A train in Canada carrying crude oil got out of control and spilled in a small town causing a large explosion that killed several and incinerated part of the downtown area. We need energy sources that can’t easily explode and cause massive death when spilled. If accidents happened like this in the renewable energy industry conservative politicians would be demanding the end of all clean energy, but since the blood is on the hands of the dirty energy industry then the suffering of this town is just part of the cost of cheap energy.
  • As we use up the easily accessible, high quality sources of oil, we are increasingly forced to dig deeper, both on land and underneath the oceans. The cost and environmental impact of this is huge. If companies invested billions of dollars of exploration money into research and development of renewable energy we would be much better off.
  • The US farm bill entrenches in our economy large agricultural companies pumping out lots of cheap corn, cotton, wheat and soy. The “farm bill” has passed in the US congress every year for decades, but this year it did not pass and now some groups are scrambling to upkeep the status quo.
  • People need to be healthy to make healthy environmental decisions. That means we need a society that grows and eats healthy food –  that means real food, not processed food. No matter how much we engineer our food, nothing will beat the bounty that is naturally provided by mother nature. Eat real food.

The post Enviro News Wrap: Farm Bill Foibles; Oil Theft in Nigeria; Expected Opposition to Obama Climate Plan, and more… appeared first on Global Warming is Real.

June 27 2013


I said that a long time ago, but I didn't think to put it in an NBER working paper...Dammit

There may be an economic cure for the nation’s obesity: Hike the price of food.

Raising the price of a calorie for home consumption by 10 percent might lower the percentage of body fat in youths about 8 or 9 percent, according to new research from the National Bureau of Economic Research.

via www.washingtonpost.com

On March 9, 2006, over SEVEN YEARS AGO, I wrote in this very space:

I think... the main cause of the upward trend in weight in the U.S...FOOD IS CHEAP and getting cheaper.  I present as exhibit A the graph on the right.Food_prices_1   The graph maps the relative price of food (as measured by the BLS Consumer Price Index for all food realtive to the overall CPI for all goods) from 1980-2005.  As you can see, food prices have fallen dramatically since 1980 relative to other goods.  The economist in me says "Hmmmm...food is getting cheap relative to other goods, maybe people are eating more."  But the story gets better.

If we look at the price of 'fats and oils', 'sugar and sweets' and 'fruits and vegetables' relative to 'All foods', again we see a not so surprising result (see the other graph to the right).Food_prices_2_2   The prices of fats and sweets have fallen since 1980 relative to all foods while the prices of fruits and vegetables have risen dramatically. 

So why are people gaining weight?  Sure part of it might be genetic or social or environmental, but I think it's equally plausible that the reason is economic.  If the price of food falls relative to other goods, and the price of fatty and sweet food falls relative to other foods, what would you expect?  People will substitute eating fat and sweet foods for more expensive alternatives like eating fruits and vegetables and exercising.**

Why do we care?  The CDC estimates that Medicaid and Medicare expenditures for overweight and obese people were between $25 and $50 billion in 1998.  Can anyone say 'Fat Tax'?  I'm now ducking.

June 10 2013


Enviro News Wrap: Climate Denial and Conspiracy Theories; Helping Farmers Adapt; Fracking the Amish, and more…

The Latest Environmental News HeadlinesGlobalWarmingisReal contributor Anders Hellum-Alexander wraps-up and comments on the climate and environmental news headlines for the past week:



The post Enviro News Wrap: Climate Denial and Conspiracy Theories; Helping Farmers Adapt; Fracking the Amish, and more… appeared first on Global Warming is Real.

May 14 2013


Worldwide Efforts to Combat Drought, Desertification to Take Shape in Namibia This Year

Efforts to tacle accelerating drought and desertification take shape this year an Namibia  Land degradation – more specifically drought and desertification – have become increasingly pressing problems for a growing number of countries around the world, threatening efforts to alleviate poverty, improve basic health and sanitation and address socioeconomic inequality, as well as spur agricultural and sustainable economic development.

The only multilateral, international agreement linking development and environment to sustainable land management (SLM), high-level representatives from 195 nations will be gathering in Windhoek, Namibia from September 16-27 for the 11th bi-annual Conference of Parties (COP) to review implementation of the United Nations Convention to Combat Desertification (UNCCD). Meeting for the first time in southern Africa, UNCCD delegates will review implementation of the convention to date and plan for the ensuing two years of programs and actions.

One of the greatest challenges to sustainable development

Desertification, along with climate change and the loss of biodiversity, were singled out as the greatest challenges to sustainable development at the 1992 Rio Earth Summit. Unfortunately, desertification, land degradation and drought (DLDD) have accelerated during the 20th and 21st centuries to date, posing fundamental problems and challenges for drylands populations, nations and regions in particular.

Severe land degradation is estimated to be affecting 168 countries around the world, according to a first-of-its-kind cost-benefit analysis (CBA) of the global effects of desertification released during the UNCCD Conference and Committee Meeting held this past April in Bonn, Germany. That’s up sharply from 110 as of a previous analysis of data submitted by UNCCD parties in the mid-1990s.

The resulting losses, in lives, human potential, biodiversity and ecosystems health and integrity are alarming. Resulting in the devastation of an area three times that of Switzerland every year, UNCCD analysts estimate that the annual costs of combating land degradation have reached $490 billion…and that’s only expected to increase.

Home to some 2 billion people, approximately 40 percent of the Earth’s land area is considered drylands. Due to a combination of human activities and natural forces – climate change now prominent among them – 10-20 percent are already considered degraded. The total land area affected by desertification is estimated to range between 6 million and 12 million square kilometers, putting the livelihoods and lives of a billion inhabitants at risk.

In the report, “The Economics of Desertification, Land Degradation and Drought: Methodologies and Analysis for Decision-Making,”  UNCCD estimates the costs of land degradation to be between 3-5 percent of global agricultural Gross Domestic Production. Furthermore,  “the cost of siltation of water reservoirs is estimated at USD18.5 billion per year, and salinity in global agriculture at about USD12 billion per year.”

Combatting Desertification via Sustainable Land Management

Continual research, development and rapid implementation of sustainable land management practices are the keys to meeting the challenges DLDD poses, according to the UNCCD. Unfortunately, progress in this regard has been slow and halting. Commodities, other products and ecosystem services afforded by land and ecosystems being affected by DLD are not being valued accordingly, nor are government and private sector institutional frameworks geared towards addressing the issue comprehensively or effectively, experts assert.

Posing a fundamental threat to agricultural and broad, sustainable socioeconomic development, crafting and implementing sustainable land management policies cuts across all facets of a society and challenges long, and often strongly held attitudes, values and institutional frameworks. That makes the process of addressing DLDD awkward, cumbersome and difficult, posing varied, substantial and difficult-to-resolve trade-offs and conflicts of interest.

In the midst of carrying out a ten-year strategy to address DLDD and foster development and implementation of sustainable land management policies and practices, the UNCCD is marshaling the resources of member nations in an effort to combat DLDD through sustainable land management. Part and parcel of this global initiative, UNCCD is identifying, helping develop, implement and sharing effective policies and best practices.

“SLM and ecosystem restoration are the key to enhancing the resilience of systems that are vulnerable to DLDD,” the UNCCD CBA report authors state. “Effective policies need to be based on a good understanding of the challenges faced on the ground.

“Generally speaking, policies that have successfully addressed a transition to more sustainable land-use practices have used participatory approaches, responded to local perceptions and priorities, enjoyed adequate government and civil society backing, and promoted technical packages with low risk and strong economic incentives.”

Furthermore, they go on, “Addressing weak governance and policy-induced distortions that operate through markets to promote  land-degrading activities are arguably amongst the most efficient means of tackling land degradation in developing countries.

“Lastly, given a rising global demand for commodities built on an unsustainable price signal (e.g. wheat price speculations) that converts natural capital for free to provide food, fiber, fodder and fuel, finance must become more accountable for its impact on nature, creating opportunities for change.”

Image credit: iJuliAn, courtesy flickr

The post Worldwide Efforts to Combat Drought, Desertification to Take Shape in Namibia This Year appeared first on Global Warming is Real.

May 07 2013


I like cashews, beets, broccoli, cabbage, brussels sprouts, chestnuts, watermelons, cucumber, fennel, macadamia, mangoes, apricots and almonds...but not strawberries. I'm OK with losing the strawberries.

The honey bees are dying—and we don’t really know why. That’s the conclusion of a massive Department of Agriculture report that came out late last week on colony collapse disorder (CCD), the catch-all term for the large-scale deaths of honey bee groups throughout the U.S. And given how important honey bees are to the food that we eat—bees help pollinate crops that are worth more than $200 billion a year—the fact that they are dying in large numbers, and we can’t say why, is very, very worrying.


The problem is that there doesn’t seem to be a single smoking gun behind CCD. The USDA report points at a range of possible causes, including:

  • A parasitic mite called Varroa destructor that has often been found in decimated colonies.
  • Several viruses
  • A bacterial disease called European foulbrood that is increasingly being detected in U.S. bee colonies
  • The use of pesticides, including neonicotinoids, a neuro-active chemical
... As Brad Plumer pointed out over at the Washington Post, it’s not that the E.U. necessarily has more evidence about the role that the chemicals might be playing in CCD. This is a classic case of policymaking by the precautionary principle. The pesticides are considered guilty until proven innocent, and so they’re preventively banned, even before the scientific case is rock solid. That’s not unusual for European environmental regulation, especially in regards to chemicals. In the U.S.it’s the reverse—before the federal government is likely to take the step of banning a class of pesticides, and pissing off the multi-billion dollar chemical industry, you’re likely to see a lot more science done.
So what we may get in Europe and the U.S. is a de facto field test of the real impact of neonicotinoids on CCD. In two years, if American bees are still dying and their European cousins are thriving, we might just have our answers. And if not, well, I hope you don’t like cashews, beets, broccoli, cabbage, brussels sprouts, chestnuts, watermelons, cucumber, fennel, strawberries, macadamia, mangoes, apricots, almonds or any of the other dozens of food crops pollinated by our hard-working, six-legged, unpaid farm workers.

via science.time.com

April 29 2013


Daily Demand and Supply: Mary Jane's Last Dance?

With reference to Colorado proposing a 30% tax on recreational marijuana sales (15% excise tax and 15% sales tax),

Jeffrey Miron, an economics professor at Harvard University and a senior fellow at the Cato Institute, a libertarian group ... said that as long as federal marijuana laws continued to be unsettled, collecting taxes would be challenging. Moreover, he said, there is no way to predict how many customers would continue to buy on the black market.

After Prohibition ended in 1933, states levied taxes on alcohol, in part because they were desperate for revenue after the Great Depression. But that shift, Dr. Miron noted, was undertaken with the full support of the federal government.

“It’s easy to get a little overexcited that legalizing marijuana is going to solve the world’s budgetary problems,” Dr. Miron said. “But the question for the tax revenue part of this will be how much the federal government allows these markets to come completely above ground.”

via www.nytimes.com

The revenue collected from a tax will hinge on the relative price-elasticities of demand and supply.  The less price elastic the demand for a good, the more revenue can be collected with a tax--because people still buy the good even at higher prices.  With federal support for marijuana sales it is likely that demand for legal marjuana would be much less price elastic, and a state tax would raise much more revenue for the state than without federal support--making the tax more effective at raising revenue. 

But then again, I guess it depends on whether the goal of the tax is to raise revenue.

And I wonder if the demand for Doritos has increased in Colorado?

If so, maybe they should tax Doritos instead.


March 21 2013


Solutions to the World Water Crisis Requires International Cooperation

This image from International Rivers demonstrates the vital need for international cooperation for dealing with the world water crisisSharing water across international boundaries is a complex international challenge that requires coordinated water policy formulation and responsible governance. To meet global water requirements governments at all levels need to work together to craft clear policies and enact enforceable laws. To address the world water crisis, governments, corporations and other concerned parties need an ambitious mission, long term vision, strategic goals and specific detailed planning.

Water is important for all living organisms. Without water, there will be no life. Entire civilizations have collapsed due to water shortages, therefore the pressing importance of finding international water solutions cannot be overstated.

People have been controlling water for more than four thousand years. The issue we face today is not about whether we should manage water resources, the issue is how this can best be achieved.

Water does not pay heed to national boundaries, as water systems commonly wind their way through many countries. Successfully addressing the problems associated with water, demands local, national, and regional cooperation.

To enable the available water resources to benefit the largest number of people, we need to see more responsible water harvesting, conservation and management. Because water is essential for all life and all sectors of society, we need widespread inclusive involvement to develop workable solutions. Water harvesting and watershed management is everyone’s business from the individual right up to national governments from the local organizations to multinational corporations.

There are examples of responsible water management that improve livelihoods, but more commonly, water is exploited in ways that do not benefit everyone. Historically, powerful actors have used water in ways that are harmful to others and the environment. Downstream users are routinely affected by users upstream due to things like diversion and pollution.

When water is inappropriately allocated, there are widespread deleterious consequences that impact the most fundamental elements of modern society including food, energy, business and governments.

Water and food

Drinking water is essential for life and the key to food security. We are already facing water shortages alongside growing agricultural demands. Burgeoning populations will further tax dwindling water resources. Over the next 40 years, agricultural production will need to increase by 60 percent to meet rising demand for food.

Water and energy

Water is essential for all forms of energy production. The connection between water and energy takes several forms including generating hydropower, agricultural applications to grow biofuels and the cooling of energy generating machines. The absence of water can cause power outages and force some very difficult decisions related to water allocation. Water is also vital to renewable sources of energy like biomass, hydropower, wind-power and even solar.

The natural gas extraction method known as hydraulic fracturing or “fracking” is another major source of water usage and a source of contamination. A 2009 report on modern shale gas by the Groundwater Protection Council, “Modern Shale Gas Development in the United States: A Primer,” stated that “[t]he amount of water needed to drill and fracture a horizontal shale gas well generally ranges from about 2 million to 4 million gallons.” The water used for fracking is contaminated with acids and other chemical additives. This extraction technique also releases naturally occurring radioactive elements and carcinogens like benzene.

Responsible energy development requires extensive water management planning, however, this is often absent in national energy infrastructure strategies. A report from the World Resources Institute illustrates the point. This report notes that nearly 80 percent of India’s planned power plants will be located in areas with very poor access to water.

The business case for pursuing water sustainability

Water scarcity and declining quality are widely acknowledged as growing problems that affect businesses globally. In response to this growing awareness, water sustainability is emerging as a strategic priority. Year after year water has climbed the corporate agenda. Corporations are realizing that they need to reduce their water footprint, address water related business risks and opportunities, and ultimately craft water sustainability strategies. Water management is one of the greatest challenges faced by the business community and it is emerging as a critical success factor.

The business community is not doing enough

Water is the new sustainability frontier and while businesses are beginning to understand the issue, they are not acting fast enough. A 2012 Carbon Trust study of 475 senior executives of large companies in Brazil, China, South Korea, the UK and the US, found that only one in seven firms has set a target for water reduction, or publicly reported their water performance. According to an October 2012 analysis by KPMG, 60 percent of the world’s 250 largest companies lack a long-term water strategy.

Mandating responsible water use

As the Earth’s most valuable single resource, governments must mandate responsible usage. This is precisely the conclusion of the Indian state of Maharashtra which is suffering from the ravages of long term drought. According to the business publication Livemint, Maharashtra state government is planning to make it compulsory for companies to adopt measures that include water recycling and rain water harvesting.

UN Water Convention

The UN convention for water provides useful policy recommendations and legal frameworks for the protection and management of local and transboundary water.

In 1992, the UN Convention on the Protection and Use of Transboundary Watercourses and International Lakes (Water Convention) offered guidelines intended to strengthen national measures for the protection and ecologically sound management of transboundary surface waters and groundwaters.

The Convention obliges parties to prevent, control and reduce transboundary impact, use transboundary waters in a reasonable and equitable way and ensure their sustainable management. Under the Convention parties bordering transboundary waters must cooperate by entering into specific agreements and establishing joint bodies. The Convention includes provisions for monitoring, research and development, consultations, warning and alarm systems, mutual assistance, and exchange of information, as well as access to information by the public.

In 1999, the Protocol on Water and Health sought to protect human health through better water management, including the protection of water ecosystems, and by preventing, controlling and reducing water-related diseases. It is the first international agreement of its kind adopted specifically to attain an adequate supply of safe drinking water and adequate sanitation for everyone. Parties to the Protocol commit to set targets in relation to the entire water cycle.

Initially the Water Convention was negotiated as a regional instrument, but in 2003 the Convention was amended to allow accession by all the UN Member States. The amendments entered into force on 6 February 2013, turning the Convention into a global legal framework for transboundary water cooperation. (It is expected that non-ECE countries will be able to join the Convention as of the end of 2013).

The 2003 Protocol on Civil Liability provides a comprehensive regime for adequate and prompt compensation for damage resulting from transboundary effects of industrial accidents on transboundary waters.

A global water agreement is an ambitious undertaking. While the UN Water Convention has provided valuable frameworks, there are numerous obstacles that are impeding implementation.

To succeed governments must coordinate policy and table effective legislation. March 22nd is World Water Day and the theme for 2013 is appropriately, “cooperation.” This year’s theme could not be more prescient. The diverse array of concerned parties must work together to find solutions and agree on implementation strategies. In the absence of global cooperation we will face devastating water shortages and far reaching civilization altering affects.

Richard Matthews is a consultant, eco-entrepreneur, green investor and author of numerous articles on sustainable positioning, eco-economics and enviro-politics. He is the owner of The Green Market Oracle, a leading sustainable business site and one of the Web’s most comprehensive resources on the business of the environment. Find The Green Market on Facebook and follow The Green Market’s twitter feed.

Image credit:Alison M.Jones for NoWater-NoLife.org and International Rivers (under creative commons license), courtesy flickr



The post Solutions to the World Water Crisis Requires International Cooperation appeared first on Global Warming is Real.

March 19 2013


Daily Demand and Supply: Everything you could ever want in one example

Decreasing supply of an input (corn ethanol credits are an input to gas production for refineries),  increasing exports due to relative price decreases in importing countries, decreasing supply of refined gas, inelastic demand for gas...what more intrigue could you want?

Congressional committees are taking note of a massive spike in the price of corn ethanol credits that refiners use to meet the Environmental Protection Agency’s renewable fuels mandate — amid concern it could increase gasoline prices.

House and Senate energy panels are eyeing the price of ethanol renewable identification numbers, or RINs, which have skyrocketed from pennies a gallon to more than $1 per gallon in recent weeks. That could cost the refining industry $7 billion this year, according to a Barclays analyst as cited by the Financial Times.

“We’ve talked about how they’ve been skyrocketing,” House Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) said last week, though he was unsure what action his panel would take.

Refiners and the ethanol industry disagree about the cause of the price spike.

A spokesman for Valero, the largest independent U.S. refiner, said refiners can do only three things about the spike in the short term: Increase gasoline exports to countries that do not have the added RIN cost, decrease the amount of gasoline refined or shift the costs to gasoline consumers. “I suspect a combination of all three things happening with refiners,” said the spokesman, Bill Day.

That could further restrict domestic supply and raise gasoline prices, which typically rise anyway around the summer driving season.

via www.politico.com

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