CARD study: removing trade distortions on US ethanol
If the United States cut ethanol tariffs and subsidies, prices would drop in the US as imports rise dramatically, according to a new report by Iowa State University's Center for Agricultural and Rural Development (CARD). Removal of U.S. Ethanol Domestic and Trade Distortions: Impact on U.S. and Brazilian Ethanol Markets analyzes the impact of trade liberalization and the removal of the federal tax credit in the United States on American and Brazilian ethanol markets. The study's authors, Amani Elobeid and Simla Tokgoz, find that the removal of trade distortions induces a 23.2 % increase in the price of world ethanol on average between 2006 and 2015 relative to the baseline. However, prices for domestic ethanol in the US drop by 14.1 %, which results in a 7.5 % decline in production and a 3.2 % increase in consumption. Notably, U.S. net ethanol imports would increase by 192.8 %. Brazil responds to the higher world ethanol price by increasing its production by 8.8 % on average.

USDA report: China's policies towards ethanol
China has ambitious plans to expand its domestic biofuels industry, according to a report by the United States Department of Agriculture. Biofuels: An Alternative Future for Agriculture, examines China's current production of biofuels and its intentions to promote the industry. Although China has encouraged the production of fuel ethanol over the last two decades through a mixture of subsidies and other financial mechanisms, the study notes that its domestic industry is still relatively small. However, the production of fuel ethanol and biodiesel will grow quickly; by 2020, the country aims to meet 15 % of its energy transport needs with biofuels. Currently, China exports a small amount of its biofuels, and the study predicts that these exports will shrink as domestic consumption increases. Imports are not expected to increase, as high-tariffs and other restrictions will likely stay in place.

Bank Sarasin weighs the sustainability of biofuels
The Swiss private bank Sarasin has taken a skeptical posture toward the continued expansion of the biofuels industry in a new report entitled Biofuels-Transporting Us to a Fossil-Free Future?. "For some time now we have been seeing the share prices of companies active in the biofuel industry rising sharply in response to investor's high expectations," says Matthias Fawer-Wasser, an analyst with the bank. "We are less excited about the future of this industry, because its expansion will quickly come up against certain natural constraints." Primary among these constraints is land; as the industry expands, biofuels will increasingly come into direct competition with food crops over limited land. While the European Commission aims for biodiesel and bioethanol to account for 5.75 % of fuel consumption by 2010, the bank warns that may exceed the sustainable limit. "If there are no technological advances to improve the use of biomass, we place the present limit for the environmentally friendly and socially responsible use of biofuels at roughly 5 % of current petrol and diesel consumption in the EU and US," says Mr. Fawer-Wasser.

Input-Outrageous: The Economic Impacts of Modern Biofuels Production
There exists considerable confusion about the net impacts of ethanol plants on local, regional, and national economies. According to Dave Swenson, an Associate Scientist in the Department of Economics at Iowa State University, there is a tendency for proponents of biofuels to overstate, over-describe, and outright double-count economic activity linked to ethanol and other biofuels production. In this paper he describes the magnitude of highly optimistic economic impact claims regarding ethanol plants, and discusses some of the more common errors that appear in the analyses.

2007 Farm Bill
2007 US Farm Bill: Energy and Agriculture
As part of a series of briefing papers on the upcoming US Farm Bill, the United States Department of Agriculture has released a report on the relationship between agriculture and energy. The study notes that developing energy sources from the agricultural sector is viewed as a means to expand the domestic energy supply while decreasing America's dependence on foreign oil. To that end, government support has encouraged investment in the ethanol industry, with production expanding rapidly throughout the 1980s and 1990s. "In 2005, the ethanol industry produced 4 billion gallons of ethanol which is blended in 30 percent of the Nation's gasoline," says the report. The USDA contemplates numerous ways to further promote the domestic biofuels industry, including special tax credits and the accelerated depreciation on renewable energy equipment and facility investment.

Energy in India
Indian kerosene subsidy diverted to black marketing
A recent study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) finds that over a third of subsidies to kerosene intended for low-income consumers are diverted to black marketing or adulteration. ASSOCHAM's report, titled Need for Urgent Adjustment of Prices and Taxes on Petroleum Products, claims that 17 % of subsidized kerosene flows to the black market, while another 18.1 % is sold for non-household use. Overall, the study estimates that only a fraction of the benefits from the government's subsidies to kerosene trickle down to the neediest people. As a first step, ASSOCHAM has recommended that the government employ a tighter monitoring system to help ensure that subsidized kerosene reaches its intended recipients.