ILUC for Dummies

Imagine that you legally park your car on a city street. When you return, a stack of traffic citations rests on the windshield. Your tires are in the lines; the meter shows time remaining. You've been fined because other parked drivers throughout the city might not have parked illegally if you weren't occupying that space.

Being held responsible for the actions of strangers hardly seems fair or even logical, but that's exactly what a handful of proponents of Indirect Land Use Change (ILUC) continue to push.

The theory of ILUC goes something like this: A U.S. corn or soybean farmer decides to sell part of his or her crop to a biofuels facility instead of using it to feed animals or humans. Brazilian farmers then chop down precious rain forests or plow under pastures to plant more crops so we all have enough to munch on. Therefore, the greenhouse gasses emitted because of Brazil's bad acts are the fault of U.S. biofuel producers.

If you entertain this theory as being reasonable, there's one more thing you should know. As U.S. ethanol production has soared, the rate of deforestation in Brazil has fallen sharply.


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One would think a stat like that would put the ILUC nonsense to bed, but it hasn't.

That's because opponents of ethanol (as in oil executives protecting market share and giant food manufacturers looking for really cheap ingredients) are determined to deprive America of one of our only real, working answers to OPEC.

Unlike hydrogen cells, electric plug-ins, cellulosic fuel, and other futuristic technologies yet to make their way from theory to mass production, corn-based ethanol and biodiesel are economical and available now.

So how could ILUC upend the U.S. biofuels industry? Pay attention, because this is where things get a bit technical.

The carbon intensity—or carbon footprint—of transportation fuels is measured through what's known as lifecycle analysis. For corn-based ethanol, as an example, carbon intensity includes greenhouse gases emitted during the planting of the crop, through its harvest and ethanol conversion, until it's burned as a fuel.

Data from the University of Nebraska-Lincoln shows this measurement comes in at 48 to 59 percent less in terms of lifecycle greenhouse gas emissions than gasoline. Sounds good.

Not so with ILUC chicanery. Now ethanol producers would have to shoulder the responsibility for faceless tree cutters millions of miles away.

Factor in Brazil's appalling acts and now ethanol looks just as bad as foreign oil from an extremist environmental standpoint…especially after these same ILUC evangelists let foreign oil and gas off the hook for many of its direct emissions, such as the pollution involved with shipping oil barrels from the Middle East to the Midwest.

If there were numbers, or data, that supported adding such a penalty to ethanol, ILUC theory might have a valid place in the carbon emissions discussion. But that's not the case. Take a 2007 policy analysis drafted by California's Air Resources Board. In the document, the authors concede:

"Indirect land use changes associated with biofuel production in the (Low Carbon Fuel Standard) would be difficult to estimate because it is uncertain how increased biofuel production in one location (for instance California or Iowa) would affect the use of land in another location (for instance prairie land in the Great Plains or rain forests in Malaysia or Brazil). Few economists believe that an international computable general equilibrium model could reliably predict such land use changes."

Despite their admission of the lack of empirical evidence, the Board still embraced the concept of penalizing the ethanol industry, essentially adopting an "any number is better than zero" policy.

Now think back to those parking tickets - the ones you got for someone else's traffic mishaps. In a nutshell, that's how ILUC works; it punishes one group for violations of another.

Sounds like pretty shoddy policy.

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