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Is it worth raising food prices worldwide to counter it? Is it worth preventing development in poor countries?I can understand (but can't stand) raising oil prices to stem usage, but corn has gone up 50% since the ethanol demand. Do we stem our food intake as well?If farmer's in Ethiopia are subsidized to grow corn for fuel, what will happen to the food supply? Wouldn't this mean more people will starve? (I kind of think this is what the green crowd desires...not less human activity, but less humans).I fear the greens more than I do radical Islam....at least you know what the radical Islam's intentions are.
You have a lot of questions there and maybe I can answer some of them. I think if the first answer is a), the next two become: b) to what degree and c) will a change in our activities do any good to reverse/alter GW? Assuming, for the sake of argument, the answers are 100% and yes, then I wouldn't tax activities to death, but regulate them or prohibit them (phasing them out) over time. If activities are truly bad then get rid of them altogether. When we tax things then the rich will be able to continue their activities much moreso compared to the average citizen. Tax gasoline by 200% and the rich may be able to keep driving and the poor - the ones who need to drive to work - won't be able to. They'll have to use public transportation or whatever....creates a kind of double standard and indignation among the classes. Simply put if GW is a problem everyone faces then everyone really ought to have their activities regulated to stop it regardless of status. Besides, if you remember Rule 21, you want to fight the government tooth and nail against taking any money via additional taxation.When you regulate human activities then behavior will follow (e.g. people would be accustomed to driving around less, etc.), or better yet, some alternative "profitable" source will emerge which will allow people to continue doing what they had been doing before but in a way that won't go against the prohibitions. For example, if gasoline is rationed, people will be less likely to buy gasoline-powered cars in the future. However, car makers will see an incentive to produce non-gasoline powered cars, to make them more efficient, and sooner or later the price of these will come down as competition becomes greater.The real key is not to work against the natural flow of the free market economy but to implement policies which mimic it. One way for the government to do this is by providing incentives for people and/or corporations to develop new technologies which solve a problem without contributing to the problem. When people know they'll get tax breaks by buying certain kinds of cars, or low-consumption monitors, or whatever, demand will grow for that kind of technology. As this happens it will enrich companies which provide this but will also attract more companies to develop this technology. As this happens prices will come down, more customers will buy into this, and the underlying problem will be averted. As far as your Ethiopian farmer is concerned - if it's subsidized corn we're talking about (not a good idea) you'll get more people wanting to plant it since they know they'll get a set price for it. In the free market you don't have a finite supply; rather as something increases in demand supply will increase because more people will want to capture the growing profits from this. With corn this should work because more can be planted; with something like oil it's a bit harder due to the high barriers for companies to enter the field.
The real key is not to work against the natural flow of the free market economy but to implement policies which mimic it. One way for the government to do this is by providing incentives for people and/or corporations to develop new technologies which solve a problem without contributing to the problem. When people know they'll get tax breaks by buying certain kinds of cars, or low-consumption monitors, or whatever, demand will grow for that kind of technology. As this happens it will enrich companies which provide this but will also attract more companies to develop this technology. As this happens prices will come down, more customers will buy into this, and the underlying problem will be averted.
I agree with this 100%. If they are not going to use the free market, this isn't goingto work. Someone will end up paying for it...most likely the poor.What I have problems with is MAKING someone do this,which seems to be the direction we are going. If I want my SUV, then so be it. If gas prices go real high, or if I can get a tax break by buying a Corolla, then that's my choice. I just don't want to be forced to choose or penalized because of that choice (I fear the penalties are coming)
As far as your Ethiopian farmer is concerned - if it's subsidized corn we're talking about (not a good idea) you'll get more people wanting to plant it since they know they'll get a set price for it. In the free market you don't have a finite supply; rather as something increases in demand supply will increase because more people will want to capture the growing profits from this. With corn this should work because more can be planted; with something like oil it's a bit harder due to the high barriers for companies to enter the field.
My problem with this, corn price affects all food. We may be able to lower our oil consumption by price increases, but not our food consumption. People may be able to drive less, but they can't eat less. If as you say, more farmers want to grow corn for ethanol, wouldn't that decrease the food supply?
The real key is not to work against the natural flow of the free market economy but to implement policies which mimic it. One way for the government to do this is by providing incentives for people and/or corporations to develop new technologies which solve a problem without contributing to the problem. When people know they'll get tax breaks by buying certain kinds of cars, or low-consumption monitors, or whatever, demand will grow for that kind of technology. As this happens it will enrich companies which provide this but will also attract more companies to develop this technology. As this happens prices will come down, more customers will buy into this, and the underlying problem will be averted.
I agree with this 100%. If they are not going to use the free market, this isn't goingto work. Someone will end up paying for it...most likely the poor.What I have problems with is MAKING someone do this,which seems to be the direction we are going. If I want my SUV, then so be it. If gas prices go real high, or if I can get a tax break by buying a Corolla, then that's my choice. I just don't want to be forced to choose or penalized because of that choice. I fear the penalties are coming. (Oh, Mr. skiguy, you used more than the allotted amount of electricity this month, therefore you have to pay a carbon offset fee.)
As far as your Ethiopian farmer is concerned - if it's subsidized corn we're talking about (not a good idea) you'll get more people wanting to plant it since they know they'll get a set price for it. In the free market you don't have a finite supply; rather as something increases in demand supply will increase because more people will want to capture the growing profits from this. With corn this should work because more can be planted; with something like oil it's a bit harder due to the high barriers for companies to enter the field.
My problem with this, corn price affects all food. We may be able to lower our oil consumption by price increases, but not our food consumption. People may be able to drive less, but they can't eat less. If as you say, more farmers want to grow corn for ethanol, wouldn't that decrease the food supply?
My problem with this, corn price affects all food. We may be able to lower our oil consumption by price increases, but not our food consumption. People may be able to drive less, but they can't eat less. If as you say, more farmers want to grow corn for ethanol, wouldn't that decrease the food supply?
If more farmers are growing corn that would increase the food supply. If corn is being used for ethanol that would increase demand and that in turn would decrease the available supply.Supply and demand are not static - at least not with a product like corn. They act off one another. If there is a spike in demand for corn the supply will stay the same and prices will increase. However, the way the market works is that if this demand remains high then you will find more people wanting to sell it (because they see there is profit to be made) and so you will have increased supply. Of course when supply increases it means that each product is not as valuable (scarce) any more and prices will decrease. You will have an equilibrium. With something like corn, someone can plant it in their back yard and sell it. In the short term prices may rise on corn but in the long term it should even out.
Perhaps I'm looking at this incorrectly? I'm thinking corn production will increase, but this increase will go to the energy demands instead of food, so food prices will become high. You need to grow an awful lot of acreage to meet energy demands, so wouldn't that cut in to other farm products and create a shortage?
Perhaps I'm looking at this incorrectly? I'm thinking corn production will increase, but this increase will go to the energy demands instead of food, so food prices will become high. You need to grow an awful lot of acreage to meet energy demands, so wouldn't that cut in to other farm products and create a shortage?
Hmmm... the English needed more cotton, once upon a time, and encouraged the kind folks in India to increase their acreage... which the Indians did. To the end that their was less for their own textile trade (the English paid more) and more folks grew cotton (since they could make more money on this cash crop than was possible on staple crops). That's in the history books... reading on we learn that the net result was that: a) the domestic textile industry in India went in the toilet b) food production went down driving prices (for foodstuff imported by England) went up c) the Indian economy suffered for the benefit of EnglandBefore anyone jumps me about spanking the Brits let me say there are two very positive things that resulted from the English hegemony in India. IPA and Gin & Tonic. IMHO. Oh yeah, Iguess the rail system and the PO count too but have far less impact than the liquids (at least out side India ;D).Disclaimer: these are soley my opinions and not influenced by Steven A. Grasse's book,The Evil Empire--101 Ways That England Ruined The World... an interesting but rather Anglophobic rant.WallyPS: If we want to produce more ethanol corn is far less efficient than (at least one) native grass... work smarter not harder!
PS: If we want to produce more ethanol corn is far less efficient than (at least one) native grass... work smarter not harder!
I think just sticking with oil is the smart choice (not that I'm being influenced by my Exxon and BP stock or anything ::))
As I tell my friends that own PG&E stock when I run my X'mas lights… “at least I know someone who's getting the benefit of the high rates.” Merry Christmas! 😉Cheers,Wally
Perhaps I'm looking at this incorrectly? I'm thinking corn production will increase, but this increase will go to the energy demands instead of food, so food prices will become high. You need to grow an awful lot of acreage to meet energy demands, so wouldn't that cut in to other farm products and create a shortage?
Yes, you're right...but it doesn't mean that very high demand won't equate to very high supply. Corn should be relatively easy to grow, so even if there's a huge demand for corn for energy and it's added on top of demand for consumption, suppliers will still increase their supplies. Think of the net demand and the net supply; it may take some time for supply to catch up with demand but it should happen because suppliers see there's money to be made in it.And as Wally said there's a kind of grass which yields higher energy production than corn. I saw an episode (I think Modern Marvels on the History Channel) which said something corn provides an energy factor of 3 per set unit, but sugar (like they use in Brazil) yields a much better energy factor of 8 per set unit. People are studying/working on a kind of grass which can grow in a variety of places which has an energy factor of 10 per set unit. That would be a better bet than corn/ethanol production.
