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Michael McCarthy: 'Free lunch' that could cost the earth

When biofuels burst onto the environment scene a few years ago, they seemed to be that rarest of phenomena: the free lunch.

Crops used to produce carbon-based fuels would suck carbon dioxide out of the atmosphere while they were growing, so when the fuel was burned, the CO2 that was then emitted was only the stuff that the crops had originally taken up. Result – no net addition of CO2 to the atmosphere.

Clever or what? Here, it seemed, was the very way to keep our ever-expanding number of cars on the road, and planes in the sky, without contributing to climate change. But although the case for the use of biofuels is still widely regarded as strong, the problems they may bring in their wake have become increasingly visible.

Quite apart from today's evidence that the production cycle may add more CO2 to the atmosphere than it removes, there are two main drawbacks. The first is that large-scale biofuel production may drive the clearance of virgin rainforests. The second is that the huge demand for fuel crops is driving food prices up around the world and so worsening global poverty. The Washington-based Earth Policy Institute said the demand for grain used in US ethanol distilleries had jumped from 54 million tons in 2006 to 81 million tons in 2007.

The knock-on effect on world food prices is inevitable, and it only proves what Milton Friedman said about free lunches: There ain't no such thing.