Image courtesy of newconsumer.com
As each week goes by, it seems the criticism against biofuels subsidies gets louder. On the heels of an International Monetary Fund (IMF) report calling for the United States and the European Union to cease biofuels tariffs and incentives, the Geneva-based Global Subsidies Initiative also advised that biofuels subsidies should be eliminated and that mandates should not be established.
In a new report, "Biofuels – At What Cost? Government support for ethanol and biodiesel in the United States: 2007 Update," the Global Studies Initiative, which is a program of the International Institute for Sustainable Development, found that U.S. policy is too focused on existing agricultural and energy arrangements, such as subsidies. Instead, the focus should be on trying to find overarching ways to reduce the country's energy consumption.
The Initiative recommended that U.S. lawmakers should:
- Introduce a mechanism to reduce biofuels manufacturers' subsidies during periods when oil prices are high;
- Consider the environmental impact, as well as the biomass cycles, of any subsidies program;
- Create competition within the transportation sector to encourage alternatives to liquid- fueled vehicles; and
- Establish an evaluation process that assesses the cost effectiveness of policies made at all levels of government.
"U.S. lawmakers...should ensure that any new measures put in place can be dismantled rather than 'set in stone.' And they should ascertain whether support for biofuels is actually undermining the outcomes they seek to achieve," the report said.
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