Political Forums - Brazil's Biofuel Failure

Once again the myopic thinking by politicians results in failure. The results were obvious to anyone that cared to follow the economic consequences of artificially increasing the demand for ethanol.

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A new moment for mankind.” That was how Brazil’s former president, Luiz Inácio Lula da Silva, described his country’s biofuel boom in March 2007. Back then, Brazil was the poster child of ethanol fuel, its output second only to that of the United States. Fermenting the sugars in the country’s abundant sugar cane produced a motor fuel that lowered carbon dioxide emissions, and many saw Brazil as a model for how the world could shed its addiction to oil, creating jobs along the way.

Five years on, Lula’s vision has tarnished. Biofuels are falling from grace around the world as critics charge that devoting millions of hectares of agricultural land to fuel crops is driving up food prices and that the climate benefits of biofuels are modest at best. But the fall has been hardest in Brazil, where government policies have compounded the effects of the global economic downturn.

Domestic consumption of liquid ethanol this year has been 26% lower than for the same period in 2008. Forty-one of the country’s roughly 400 sugar-cane ethanol plants have closed over that time. The price of pure ethanol at the pump is so high that in most states it is cheaper to fill up flexible-fuel cars with petrol blends that contain about 20% ethanol.
http://www.scientificamerican.com/ar...alls-in-brazil