Comment Log Display

One can argue the land use surcharge back and forth on a
philosophic level and on the accuracy of the model. However, there
are  several fundamental problems with the way land use surcharge
is applied. Generally speaking land use intensity is highly
cyclical. It corresponds mainly a combination of demand and price
for agriculture products. The report clearly stated the case for
land use intensity increase with increased demand for bio-fuels.
However, as seen recently, the price of agriculture commodities are
only partially dependent on bio-fuel demand. In Q4 of 2008 we saw
record production of ethanol but nonetheless corn and ethanol
prices fell by 70%. This means that corn prices are more sensitive
to oil prices than to demand from the biofuels industry. Put those
two together, and the result is that as oil prices go up, commodity
prices go up, corn prices go up and land use intensity goes up with
it. Then we go through a period of oversupply with corresponding
price reduction and land use intensity reduction. So to the extent
that bio fuels offset the demand for oil and put a downward
pressure on gasoline price, it moderates the increase in land use
intensity.

The second error I see in the analysis is in the accounting of GHG
emissions from the conversion of cattle pasture to agriculture
(corn) land. Most cattle pasture in the US is grass land. The
cattle eats the grass and converts it to methane which is 23 times
more potent then CO2. As corn becomes more expensive, feed become
more expensive so meat production becomes less economical. It is
logical that meat growers will then lease their land to corn
growers. As I see the reality of corn expansion, brand new barren
land is the last resort. The growers will first grow more corn on
the land they already cultivate, then they will use land that was
cultivated in the past but is now idle (because it was not
profitable to cultivate). Then they would use cattle pasture that
is more productive than barren land. As I said, the calculation of
land use change from cattle pasture to corn is incorrect because it
does not take into account the root system (corn has a much more
robust root system which capture more CO2 than grass root system.
Corn harvesting does not involve removing the roots from the
ground.)  and it only focuses on CO2 which misses the potent GH
effect of methane gas. Add to this the GHG emission of meat
processing, packaging, freezing and transportation and you will get
huge savings in GHG emissions when converting cattle pasture to
biofuels crop.

The third error is ignoring the fact that the same market forces
that increase the demand for corn ethanol and with it increase in
land use intensity, will eventually find a cheaper alternative that
will reduce the demand for corn ethanol and with it reduce the land
use intensity: As land become more valuable and corn more
expensive, corn ethanol will become more expensive too. This will
further increase the effort to invest and produce ethanol from
other sources such as cellulosic ethanol and ethanol from
algae/seaweed. These new and cheaper sources will undermine the
demand for corn ethanol which will reduce the demand for land
eventually causing the land to revert back to its original use.
This demand destruction is surly within the scope of the timeframe
that the land use change surcharge applies to.