How Could G8 Promote Food Security? Stop Biofuels Subsidies

Asia Society's Sustainability Roundtable, a regular feature on the re:ASIA blog, features insight and analysis on current events from our team of sustainability experts. This week, we asked our roundtable to reflect on last week's G8 summit, which took place May 26-27 in Deauville, France. How did the summit address issues such as nuclear safety, climate change and the ongoing bioenergy debate?

Peter Timmer is a non-resident fellow at the Center for Global Development and was Principal Advisor to the Asia Society Task Force on Food Security and Sustainability in Asia. Now retired from teaching, he is the Thomas D. Cabot Professor of Development Studies, emeritus, at Harvard University.

I am finding it very hard to be positive about the results of the G8 meeting held in Deauville, France, late last month. Part of my discouragement, no doubt, stems from the fact that nuclear safety is not my field, so I am no more than an informed citizen on that. But part stems from a comment from one of my food security colleagues immediately after the meeting, reacting to the announcement of $20 billion in aid to Arab countries participating in the democratic movements: "I think we just lost the $20 billion committed to food security at the G8 meeting in L'Aquila in 2008 ..." Virtually none of that money has actually been allocated, and very little spent. My own sense is that we will never see the rest.

Without new money on the table, what can the G8 do to promote food security and sustainability? It is a tribute to the power of the (short-run) market paradigm that all countries now use to organize their economies (excepting, of course, North Korea and remnants of Cuba), that I have to use the terms "security" and "sustainability" separately. If price signals included long-run environmental costs, the two concepts would nearly coincide, but there is little to suggest that we are close to that goal.

So, without new money, or any realistic hope of significant policy change to realistically price carbon (and other environmental insults), what can be done? The obvious step is to stop subsidizing biofuels and end the mandates for their use. My own "back of the envelope" guess is that an end to U.S. support for corn-based ethanol would cause the world price of corn to drop almost immediately by 10-20 percent. It is hard to imagine a more positive step to improve food security than that. If the Europeans also did the same for their vegetable oil-based biodiesel programs, there would be a similar effect in those markets.

Finding "sustainable" sources of renewable energy is obviously essential for modern economies to function over the next several decades and beyond, as fossil fuels become scarcer and more expensive. But biofuels produced from raw materials grown on prime agricultural land are clearly not the source of such energy. Perhaps the G8 decision to measure the impact of biofuels on food prices and the environment will move us in that direction.