Bad Juice II: Biofuels Maybe Not Quite So Bad, World Bank Says
Posted by Keith Johnson
The biofuels battle just gets hotter.
We just wrote about the Guardian story on a World Bank report allegedly blaming biofuels for 75% of the recent rise in fuel prices, and which was reportedly suppressed for political reasons. Alas, it ain’t so, Joe, the World Bank says.
Bob Davis of the WSJ spoke with Donald Mitchell, the author of the draft report—which wasn’t secret at all, but a working paper. And like all working papers, it doesn’t reflect the official position of the World Bank.
The report was meant to contribute to a World Bank position paper on rising food prices, which was released at the Bank’s spring meeting in mid-April.
The final April report didn’t include his specific calculation. But, Mr. Mitchell says, “I never saw that as political.” Instead, he says he believes the changes were made because of “editing.” He said that he has been encouraged by World Bank management to explore the issue of biofuels and the overall rise in food prices. “I had input” into the final report that was released at the spring meeting, he said.
Mr. Mitchell said that because of the publicity engendered by the Guardian piece, the World Bank is trying to put out a polished version of his report by the end of this week.
A World Bank spokesperson added:
[Mr.] Mitchell is still getting input from peer reviewers and the paper is still being finalized. As a result, the Bank chose not to use a specific figure in the Spring Meetings and G8 papers. As [World Bank boss Robert] Zoellick said today in Japan: “That’s an internal study that we’ve been circulating to people to try to get different views from other aid agencies and different economic analyses. So, my own view is that that is probably at the far end. You see other people talk about ranges of 20 percent, 25 percent. There’s s some at the lower end that I think are less credible. So, on this one I think I’m going to rely on the experts to be able to sort it through.”
The draft itself—which we saw—makes clear that the headline figure for biofuel’s role in the food crisis was a little overstated in the original article:
Thus, the combination of higher energy prices and related increases in fertilizer prices, and dollar weakness caused food prices to rise by about 35 percent from January 2002 until February 2008 and the remaining three-quarters of the 140 percent actual increase was due to biofuels and the related consequences of low grain stocks, large land use shifts, speculative activity, and export bans.
Not that biofuels are off the hook entirely. The draft report did say: “Increased biofuel production has increased the demand for food crops and been the major cause of the increase in food prices.” That’s still a stronger indictment of biofuels that most other recent studies, draft or otherwise.