Martin Wolf’s Financial Times column (”Biofuels: an everyday story of special interests and subsidies”) summarizes the recent Global Subsidies Initiative report and pulls no punches.

Especially valuable is Wolf’s debunking of five major rationalizations  for the “cornucopia of complex and expensive subsidies, mandates and protectionist measures” that today pass for energy and climate policy in the U.S. and Europe. A lengthy excerpt follows:

Rationalization one: biofuel subsidies reduce farm support payments. But, in fact, US evidence strongly suggests that these subsidies are being piled on top of existing farm subsidies, not replacing them.

Rationalization two: mandating biofuels will lower petrol prices. But it is obviously mad to try to lower the price of a commodity by subsidizing the production of more expensive alternatives.

Rationalization three: subsidizing biofuel is an efficient way to reduce reliance on risky fossil fuels. But biofuels are, under current technologies, complements to, rather than substitutes for, fossil fuels and are also vulnerable to their own risks of weather and disease.

Rationalization four: subsidizing biofuel is an efficient way to reduce greenhouse gas emissions. According to the report, the cost of eliminating a tonne of carbon dioxide equivalent through biofuels varies from a low of about $150 to as much as $10,000. Even the lower of these figures exceeds almost all estimates of the marginal benefit of reducing a tonne of emissions. It certainly much exceeds the cost of many alternative ways of doing so.

Rationalization five: subsidies are only needed to establish the infrastructure. But if biofuels are to be competitive, it will be unnecessary to subsidize the infrastructure. Investors can do that for themselves.