Biofuels Policy A Big Mistake?

Both the Dominion Post and NZ Herald contain interesting articles today on the biofuels issue. The Dominion Post has a small article on page 2 noting that Climate Change Minister David Parker is saying the the Government was working to ensure biofuels used in New Zealand were from sustainable sources. Why has he been forced to say this? A full page spread from The Independent's Steve Connor (the UK paper not the New Zealand paper) in the NZ Herald (page A 14) explains why. Connor's article appears to have been stimulated both by an embarrassing admission of error by the EU Environment Commissioner and by a report from the Royal Society. Basically, biofuels policy in the EU (and we suspect New Zealand) is a colossal stuff up. No cost/benefit analysis has been done before adopting policy on adopting biofuel targets, instead Governments have raced to adopt policies that appear to be doing the right thing for the environment, without really understanding what the full environmental impact is going to be. To make matters worse, this has all been a great excuse to increase Government subsidies, or to shift subsidies out of the politically sensitive agriculture area, to the politically safe environment area. What has happened? Rain forest destruction in Asia and Brazil. Grains being directed into fuels not food or animals feeds. This has led to big increases in gain prices. This had fed through into dairy and meat prices. There have been civil disturbances in Mexico and over here these developments are forcing the New Zealand Reserve Bank to either keep interest rates high or raise them even further. Which Minister is responsible - Oh David Parker again.............