Urban Renaissance Institute

Lawrence Solomon
National Post
October 24, 2002

Contrary to the naysayers who claim Western countries would face economic ruin in meeting Kyoto’s greenhouse gas targets, three winning models are proven to exist and proven to yield spectacular results.

The first model – the USSR approach – involves privatizing an entire economy. Russia became the world’s greatest greenhouse gas reducer by abandoning its centrally planned economy.

The second model – the German approach – involves privatizing a neighbouring economy. After West Germany absorbed East Germany, and converted the decrepit state-run machinery to modern markets, East Germany’s economic efficiency rose so dramatically that the new, unified Germany today produces 17% fewer greenhouse gases per capita than East and West Germany combined did in 1990.

The third model – the British approach – involves privatizing inefficient government-run sectors and giving competition freer rein. Following the U.K.’s privatization of its energy, transportation, steel and other sectors, greenhouse gases plunged while the country’s economy soared. Today, the U.K. produces 9% fewer emissions per capita than in 1990.

All industrialized countries would benefit by adopting the U.K. model of aggressively privatizing sluggish government sectors and otherwise introducing market-oriented reforms. Instead, countries such as the United States and France have only slowly continued to liberalize their economies, leading to small increases in per capita greenhouse gas emissions since 1990, and Japan and Canada, which lag far behind in modernizing their economies, have racked up double-digit increases.

But while all industrialized countries could reduce their emissions by following the U.K.’s lead – and impressively profit in the process – the one that would profit the most would be Canada, because Canada has the industrialized world’s least efficient resource sector.

Most of Canada’s increase in greenhouse gas production comes from risky investments in our energy sector, where government subsidies have led to a plethora of export projects. Without the past subsidies, the projects – whether Hibernia in the east or tar sands in Alberta – would never have materialized, to the benefit of taxpayers as well as the environment. But these export projects only begin to account for economically uncalled for emissions.

If Canada’s provincial premiers established competitive electricity markets, the way the U.K. did so successfully, the coal plants now on Alberta’s drawing boards would vanish, and many existing coal plants in Alberta, Ontario and the Maritimes would soon be mothballed. The outdated coal technology – one of Canada’s biggest contributors to greenhouse gas emissions – would be replaced partly by high-tech natural gas generators, the technologies of choice in all modern power systems, and partly by the existing hydroelectric generation in B.C., Manitoba and Quebec, provinces whose consumers now overconsume because their non-profit Crown monopolies underprice the power they produce.

Non-profit monopolies also do great damage at the local level, where public transit systems’ failure to modernize encourage more private automobiles to take to the road. If Canada’s mayors privatized public transit systems, as also occurred successfully in the U.K., our public transit vehicles would stop losing market share against the automobile. If Canadian governments at all levels also eliminated free roads – as the U.K. has begun to do through road tolling of various means – the auto’s market share would gear down further.

Even where the private sector owns industries, government interference protects them from more efficient competitors. If yesterday’s steel plants, mines, and pulp and paper mills were allowed to go bankrupt, the more efficient recycled metals and recycled papers industries would gain greatly in market share. But neither mines, mills nor factories offer the greenhouse gas savings offered by one of Canada’s most environmentally and economically ruinous sectors – agriculture.

Canada’s agricultural sector, though it represents a mere 1.5% of GDP, accounts for almost 10% of Canada’s greenhouse gas emissions, more than is produced by all of Canada’s manufacturing industries combined. The 10% figure, however, excludes the fuel used by farm equipment, the energy embedded in fertilizer, and other major sources of greenhouse gases. Once these are calculated, according to Canada’s 1996 Greenhouse Gas Emission Summary, the agriculture sector’s greenhouse gas emissions climb by another 40%.

Yet unlike the manufacturing sector, which turns a handsome profit for society, the agriculture industry – particularly the large-scale, mechanized farms – runs at a loss: For every dollar of profit that the average farmer earns, society provides $3.50 in subsidies. Without subsidies, most if not all of the large farms producing low-value export crops would disappear, many small, labour-intensive farms producing high-value crops for local markets would reappear, the farm sector would become a bigger employer and profitable, and the majority of greenhouse gases from the once oversized farm sector would vanish. The conversion to an economically sized small farm sector has another greenhouse gas bonus, too: Unlike large mechanized farms, whose crude tillers deplete carbon from topsoil, small farmers tend to enrich the land through methods that pack carbon back into the soil.

Because so many of Canada’s greenhouse gas-emitting industries are so inefficient, it’s possible that our governments’ current approach to reducing them – Soviet-style central plans, one for each sector, each plan providing a reduction quota – may succeed in reducing greenhouse gases at little or no economic pain. There’s no reason to think the next central plan won’t improve on the last.

But rather than counteract the failings of the last central plan with those of a new one, we could dispense with the central plans altogether and put our trust in the only greenhouse gas reduction strategy with a proven track record — the competitive marketplace.

To read the Saskatchewan Soil Conservation Association’s response to this article, click here.

National Post
October 9, 2002

 Letters re: The Corn Isn’t Green, Lawrence Solomon, Sept. 25.
I am advisor to the board of directors of Integrated Grain Processors Cooperative, an Ontario-based farmer-owned cooperative exploring the construction of an ethanol production facility in the province. As someone who has been involved in the fuel ethanol industry for over 20 years, I felt compelled to respond to Mr. Solomon’s article. The article is so riddled with misinformation it is difficult to know where to begin.

There are four points that I would like to make. First, ethanol is the only liquid automotive fuel that has a net positive greenhouse gas reduction benefit. There have been numerous studies conducted that demonstrate the uptake of C02 by the corn plant is greater than the amount of C02 generated by the production of ethanol. Of course, we all know that fossil fuels of any kind cannot make that claim. We can provide a number of credible studies from the U.S. Federal Environmental Protection Agency, the U.S. Department of Energy and others, that substantiate ethanol’s greenhouse gas reduction benefits.

Second, it’s unfortunate that the writer chose to use only a study done by David Pimentel of Cornell as his major reference. That report has literally been ignored as biased, inaccurate and without merit by much of the scientific community. The assumptions were inaccurate, the data used were grossly outdated and the methodology was flawed. The only ones who have given any credit to the report are those who are trying desperately to build a case against ethanol, which is why the report was produced in the first place.
Third, there have been at least 10 separate studies done by the U.S. Department of Agriculture, the Department of Energy, the internationally recognized environmental watchdog organization the Institute for Local Self Reliance, and several national laboratories. All have demonstrated that ethanol has a net energy gain from field to fuel tank of over 20%.

Finally, the food vs. fuel issue was addressed 20 years ago. Ethanol does not use food to make fuel. In fact, it enhances the food value of the corn. Only the starch is used to make ethanol, the balance is a high-protein, high-fibre feed supplement for dairy, beef, poultry and swine. It’s not more expensive than corn, it is only more concentrated than whole corn. It does not drive up the price of beef or chicken or any other livestock it is fed to. That is a totally false and misleading statement.

Farmers are not growing more corn because of ethanol; they are simply creating a new value-added market for the corn that they already grow. Fertilizer and chemical use have been dramatically reduced in the past 20 years. Farmers have depended on the land for their livelihood for generations and hope their heirs will have to opportunity to follow in their footsteps. As a result, they are keenly aware of the importance of responsible land stewardship and work hard to minimize the use of chemicals and fertilizers.

For Mr. Solomon to take a widely discredited study, and use it to spread false and misleading information about an environmentally sound, renewable fuel like ethanol is troublesome to say the least. – Mike Bryan, president and CEO, BBI International

Mr. Solomon’s objections to ethanol are based almost completely on arguments provided by Dr. Pimentel, well-known adversary of the renewable fuels movement, whose 1998 study draws primarily on old data and completely dismisses the energy value of ethanol’s primary co-products. Dr. Pimentel’s work has been widely refuted by a diverse group of academic and agricultural experts.
In recent years, tremendous gains in efficiency have been achieved in both crop and ethanol production processing. In August of this year, the U.S. Department of Agriculture released a new study showing that ethanol production yields 34% more energy than is used in growing and harvesting grain and distilling it into ethanol. Significantly increased energy gains over findings from their 1995 study are attributed to higher corn yields, lower energy use in the fertilizer industry and advances in fuel conversion technologies.
Ethanol also provides other significant environmental and social benefits, including improved air quality, reduced reliance on non-renewable energy sources, diversification of agricultural markets and rural economic development. Co-products that result from the ethanol production process include a high-protein feed that helps to keep livestock feed costs low.

Contrary to Mr. Solomon’s allegations, corn farmers in Ontario have implemented a number of initiatives to reduce the environmental impact of corn production, including reduced tillage or no-till production to protect soil integrity, reduced pesticide use and the implementation of nutrient management plans to ensure that corn crops receive only the nutrients and protection that they need to thrive and that our water sources are protected.
Since farmers do not irrigate field corn in Ontario, Mr. Solomon’s attack on corn-based ethanol on the basis of the resultant groundwater depletion and fertilizer pollution are somewhat curious. Even more so is his suggestion that increased ethanol production results in higher costs for livestock feed (and hence for consumer food products). That comes as quite a surprise to corn farmers: Despite increasing costs, and with no adjustments for inflation, corn prices are lower now than they were in 1980. – Dennis Jack, president, Ontario Corn Producers’ Association

I thought Mr. Solomon made some interesting points in his article, but was very much off base in his assessment and valuation.
When we think about oil stocks being depleted in 70 to 80 years, (seems like a long time, but really is not) we need to seriously work on alternatives. Ethanol from corn is one option – probably not that economical today but getting more efficient.
Agriculture and Agri-Food Canada may support this program, however they have a significant research arm that focuses on many aspects of alternatives for petroleum. Recently, the city of Saskatoon commissioned two buses to test out a biodiesel from canola (more efficient, less polluting), researched by AAFC and the Saskatoon research community. It is being commercialized by a group of farmers.

Mr. Solomon may be concerned about the ethanol of today, but if so, he should be talking about other alternatives – petroleum will not be around forever if we keep using it at the rates we do today. Surprisingly, this is one area where Canada can be a global leader – improved alternative green fuels from Biomass, part of the bio-based economy. I think our agricultural research community should be commended for taking these initiatives that will lead to a better environment. – Dr. Murray McLaughlin, Guelph, Ont.

. . . or cornball critics
By Lawrence Solomon

Two decades ago, David Pimentel released a startling study for the United States Department of Energy showing that making ethanol consumes far more energy than the ethanol contains. The agency – to confirm his findings – had 26 of its top scientists review his study before its release, but that didn’t satisfy Dr. Pimentel’s critics.

The United States Department of Agriculture, food giant Archer-Daniel-Midlands and others in the corn lobby vilified him, and congressmen from corn states demanded that the federal government’s watchdog, the General Accounting Office, thoroughly investigate his findings. The GAO spent 20 times as much money reviewing Dr. Pimentel’s work as Dr. Pimentel’s own team did in creating the original study. After dissecting his methodology and scrutinizing every figure, the GAO, too, endorsed Dr. Pimentel’s findings.
Two decades later, the corn and ethanol lobby is still at it. The critics that appear elsewhere on this page state that Dr. Pimentel, apart from being dead wrong, is biased, grossly outdated, incompetent, and devoid of credibility in the scientific community. Instead of putting our trust in this sham of a scientist – just about the only person in the universe who seems to find ethanol lacking, they imply – believe the bushel of counterstudies produced by the real experts.

The critics protest too much and their studies, like many things available by the bushel, aren’t worth that much. The critics fault Dr. Pimentel’s methodology while they ignore data – such as corn yields from less productive states – that doesn’t serve their interests. The critics fault him for using out-of-date data in his recent study, which relied primarily on year 2000 data, while the studies his critics cite use primarily older data – a commonly cited Department of Agriculture study, for example, uses 1990 to 1993 data. The critics accuse Dr. Pimentel of having a vested interest in his recent criticisms of ethanol, when the results of his research, which was funded by the College of Agriculture at Cornell University, came as a blow to the many pro-ethanol interests associated with agricultural colleges. Meanwhile, the ethanol studies that refute Dr. Pimentel’s findings have been conducted by government departments, farm interests and ethanol industries, all of which have a vested interest in converting corn to ethanol. None of their studies count all the energy costs associated with ethanol, as Dr. Pimentel has.

Many of the ethanol industry’s consultants, scientists and other experts are doubtless competent, as are the government scientists that have taken runs at Dr. Pimentel’s findings. The Oxford, MIT and Cornell-educated Dr. Pimentel, however, is in another league. He produced his initial study as chairman of the Gasohol Study Group, a task force convened by the Reagan Administration in 1980 to investigate the efficiency of ethanol production. Formerly a White House advisor to president Nixon, he helped establish the United States Environmental Protection Agency. Dr. Pimentel, far from being a widely discredited scientist, has been chairman of the Environmental Studies Board in the National Academy of Sciences, he has served on 12 of their distinguished panels, and he is internationally renowned as one of the best in his field. Last October, his ethanol findings were published in the 2001 edition of the Encyclopedia for Physical Sciences and Technology, a peer-reviewed publication. The criticisms from his opponents are as outrageous as they are self-serving.

Dr. Pimentel’s critics also tout ethanol’s benefits in combatting air pollution. While ethanol does have some beneficial attributes – it replaces potentially harmful agents such as MMT and MTBE, and reduces carbon monoxide emissions – ethanol’s environmental drawbacks may entirely counter the benefits. Ethanol produces suspected carcinogens such as aldehydes and just as many nitrous oxides as its competitors. Last week, in a settlement with the Environmental Protection Agency for violations of the Clean Air Act, 12 ethanol plants agreed to pay fines and install devices called thermal oxidizers to reduce emissions. Ironically, the energy these oxidizers will burn will make ethanol an even greater energy glutton, and an even greater economic boondoggle.

Read the original article, “The corn isn’t green” 

New! More readers respond
Letters to the Editor, National Post, Oct. 15, 2002

Re: Corn-based Fuel or Cornball Critics
Lawrence Solomon, Oct. 9.

As a student of energy politics, I believe there is no question that the benefits of ethanol manufacturing follow the path of the money trail and not the science of energy production. U.S. tax dollars subsidize both ethanol factories and the farmers’ corn production in order to maintain the consumer cost price. So Mr. Solomon’s article proves what we already know.
My purpose in writing is to suggest that corn ethanol is not a legitimate subject for evaluation because corn could never amount to more than 2% volume offset to gasoline. The conversion of garbage biomass to ethanol would have been more appropriate to the energy question. Authors James Woolsey (former CIA director, Clinton Administration) and former senator Richard Lugar have made the garbage biomass-to-ethanol case in their book The New Petroleum. The primary purpose of their proposal is to make a quick conversion of vehicular fuels to 85% ethanol/15% gasoline. Some cars and trucks on the road now are dual-fuel capable and can burn this mixture. All cars on the road can be easily and inexpensively converted to dual-fuel capability with some fuel line and fuel pump replacement. This would enable the United States to have a fast track to independence from OPEC oil imports. The money saved from oil purchases could subsidize a high priority fast track.
Neither the authors nor I mean to suggest that garbage biomass-to-ethanol is the ultimate alternative, but it would bail us out for the next 20 years.
Bill Grazier, Duluth, Minn.

Re: The Corn Isn’t Green, Lawrence Solomon, Sept. 25.
This article was excellent and timely. It is crucial that we protect the environment and maximize our resources to do so. This requires us to take a comprehensive approach, use all the facts and avoid junk science. Mr. Solomon’s article helps to promote that mentality.
Several years ago when I was mayor of Waterloo, Ont., we had a different experience where “the corn wasn’t green.” Thanks to a large grant from the Ontario Ministry of Natural Resources, a group of interested parties led by the city of Waterloo and the Grand River Conservation Authority started watershed planning in Ontario with the Laurel Creek Watershed Study.
After the baseline data was gathered and assessed, the researchers advised us that the environment was at risk and the water quality of Laurel Creek was “on the edge” because of the high adverse impact of the corn fields: rapid runoff, erosion, siltation and pollution from pesticides.
The consultants made the point that by allowing urban development, with very strong provisos, we would actually be improving the water quality and the environment. The provisos included aggressive and creative water quality requirements, wide buffers along the creeks, very sizeable nature preserves and a comprehensive system of storm water management.

Measurable criteria were put in the Official Plan with the policy that, if the developers did not meet them, the next approvals would be withheld. This is a sustainable development approach which balances the environment with the economy.
The city of Waterloo has both a high rate of growth and a strong environmental ethic and I found that this sustainable development approach was very valuable in helping to achieve that balance.
Brian Turnbull, Waterloo, Ont.
Claudette Fortier, chair, Canadian Private Copying Collective