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Biofuels: Clean Fuels for the Poor?

Synthesis

The global concern with regard to climate change, due in large part to the greenhouse gas emissions resulting from the use of fossil fuels particularly for transport, has spurred many countries to try to develop alternatives that have diminished negative environmental impacts. One course of action that has taken on much recent significance has been the rapid development of fuels from plants, commonly referred to as “biofuels.” In the Philippines, this innovation in alternative fuels is directed towards replacing imported petroleum fuel, which is seen as largely benefiting motor vehicle owners and
transport operators, in addition to claimed environmental benefits. However, the impacts of these fuels on groups at the base of the socio-economic pyramid, particularly small farmers and agricultural workers, are unclear. It is the goal of this study to examine such effects, determine the ways that this development of alternative fuels is affecting the welfare of such groups, and determining possible points of policy intervention so that socio-economic benefits are broadly diffused using a value chain analysis.

Global Collective Action

Leaders of developed and developing countries all recognize the need for collective action to tame the worldwide recession.

But collective action is easier said than done. Protectionism is tempting as jobs and incomes at home are vanishing.

Topnotch economists, including Federal Reserve chair Ben Bernanke and Barry Eichengreen (University of California, Berkeley), say that mercantilist policies during times of world recession did work. See for example Bernanke’s Essays on the Great Depression (2000) and Eichengreen’s Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (1992).

Fiscal Stimulus and Global Collective Action

Let’s face it: The Barack Obama stimulus plan by itself will not lift
the US from the recession in the quickest and most decisive manner.

Some quarters—Paul Krugman, for example—have doubts about the
effectiveness of the stimulus plan. Krugman criticizes the stimulus
plan for lacking boldness as well as for being incomplete and
inadequate.

But let us assume that the Obama administration will take heed of
Krugman’s advice and adopt his more aggressive proposals. Will that
lead to the definitive stimulus?

Market failure in family-size choice

The current global economic crisis which exercises policy makers
everywhere is an example of a market failure which justifies costly
state intervention because doing nothing is much more costly. The
safety-net problem facing our own policy makers today is the more
burdensome because of our failure in the past to deal with another
market failure, one associated with family-size choice among poor
households. And this brings us to a momentous crossroad: the
Reproductive Health (RH) Bill.

Being Pro-Business is Good

In the article titled Populism and Being Anti-Business (BusinessWorld, 16 June 2008), I said that Gloria Arroyo’s populism, while pandering to the masses, is ultimately anti-poor as well as anti-business. It is a brand of populism that weakens macroeconomic fundamentals and productivity and therefore harms the whole nation.

Her being anti-business is politically partisan, and the economic consequence of this antagonism is damaging.