New U.S. Agriculture Secretary urged to give priority to reform of biofuels subsidies policy

GENEVA—December 18, 2008—The International Institute for Sustainable Development (IISD) urges Tom Vilsack, President-elect Barack Obama's nomination for United States Agriculture Secretary, to make reforms to U.S. subsidies for biofuels a priority.

Recent research by the IISD's Global Subsidies Initiative (www.globalsubsidies.org), a Geneva-based program, throws doubt on the logic behind the vast amounts of government support flowing to the biofuels industry in the United States. GSI research reveals that under existing policies, the U.S. biofuels industry will benefit from support worth over US$92 billion within the 2006 - 2012 timeframe.

Although biofuels subsidies have been promoted as a way to address concerns related to the environment, energy security, and rural development, the cost-effectiveness of achieving these goals under the current subsidy regime is low. Moreover, the sheer levels of government support to biofuels appear out of proportion to their ability to satisfy domestic transport-fuel requirements.

"As prices for agricultural commodities come down from the record highs set earlier this year, Tom Vilsack will come under intense pressure to cushion farmers with various subsidies, including those for biofuels," said Mark Halle, Director of IISD Europe. "However, we urge the new U.S. Agriculture Secretary to resist special interest lobbying, and promote policies based on their economic and environmental merits."

The IISD recommends the new U.S. administration:

• desist from increasing mandatory consumption levels for biofuels and instead adopt a neutral policy position favoring all options to reduce reliance on petroleum in the transport sector;

• take into account the environmental effects of biofuels production and distribution cycles in the design of policies that affect biofuels;

• establish a transparent evaluation process to assess the cost-effectiveness of support policies at all levels of government in attaining the declared objectives behind U.S. biofuels policy

For more information please contact the IISD's communication team members:

• Damon Vis-Dunbar, Geneva
  Phone: +41 (22) 917-8748
  Cell: +41 (78) 818-0501
  E-mail: dvis-dunbar@iisd.org

• Nona Pelletier, Winnipeg
  Phone: +1 (204) 958-7740
  Cell: +1 (204) 962-1303
  E-mail: npelletier@iisd.ca