Food or Fuel

Spiegel Online:

Food prices are skyrocketing. Arable land is becoming scarce. And forests continue to disappear across the globe. The world must decide between affordable food and biofuels.

Biofuels may not be the answer

Guardian:

Controversial plans to make cars greener by using fuel made from crops and animal fat will be thrown into doubt this week when MPs are expected to question whether they will do more harm than good.

Biofuels have been hailed as a green alternative to oil by some, but in the US, where there are massive plants converting maize (corn), it has been criticised for making food more expensive and being environmentally unfriendly.

From April, petrol and diesel sold in the UK must have 2.5 per cent biofuels, drawn from sources such as tallow, rapeseed and sugar beet, rising to 5 per cent in two years' time. The EU wants to increase this to 10 per cent by 2020.

But the House of Commons Environmental Audit Committee is likely to call tomorrow for the schemes to be delayed because of fears that biofuels can have negative consequences. Criticisms include claims that producing some biofuels emits more greenhouse gases than fossil fuels and that habitats such as tropical rainforests are being destroyed to plant the new crops. The report, 'Are Biofuels Sustainable?', is also thought to predict that rising food prices pushed up by competition for land could restrict growth in the industry.

The committee's report follows a separate study last week by the Royal Society calling for strict controls on how biofuels are grown. Stavros Dimas, the EU Environment Commissioner, has also admitted that it might have been premature to press ahead with biofuels, which were fiercely debated at the United Nation's Bali conference on climate change in December.

Green is good for business

Remember the old canard about environmental responsiblity being bad for business and jobs? Well, as CNN reports:

Venture investment in energy technology firms reached new highs this year, more than tripling the investment recorded for 2005, according to data released Wednesday by Thomson Financial and the National Venture Capital Association.

In the first three quarters of 2007, nearly $1.7 billion, or 7.4% of U.S. venture capital investments, was put into American companies developing technologies that conserve energy and resources, protect the environment, or eliminate harmful waste. The majority of this year's clean technology investment was made in companies based in California, Massachusetts, and Texas, with the solar energy and biofuel industries receiving the bulk of the investment dollars.

"This is a remarkable share of the venture capital pool when you consider that less than five years ago clean technologies represented less than 1%," says Rodrigo Prudencio, a partner with Nth Power, a California-based venture capital firm that backs early stage energy technology companies.

Annual venture investments in clean-technology companies went from $469.7 million in 2005 to $1.4 billion in 2006, and this year's total through September has already seen a 21% increase over last year. The number of investments made has also increased, with 149 deals made in the first nine months of this year, as compared to 129 deals at the end of 2006.

"Long term, this is an area that is going to be as important to the venture capital community as biotech and IT have been in the last twenty years," says Mark Heesen, NVCA president.