Saturday, April 19, 2008

Biofuels Push May Need Rethinking, IMF Johnson Says


April 18 (Bloomberg) -- The U.S. and Europe may have to reconsider their promotion of biofuels in the wake of surging food prices around the world, International Monetary Fund Chief Economist Simon Johnson said.

"I think rethinking is the right word,'' Johnson said in an interview on Bloomberg Television's Political Capital with Al Hunt,'' to be aired today. "It used to be the case that biofuels, corn-based ethanol in the United States and also the development of bio-diesel in Europe, seemed like kind of a side issue. It's now front and center in global geopolitics.''

The U.S. and other nations are encouraging the use of fuels made from crops such as corn and soybeans to reduce dependence on petroleum and limit environmental damage. Demand for biofuels, along with increased competition for cropland between food and fuel uses, is taking up much of the increase in the global crop production, according to a World Bank report. Food production is failing to keep up with demand, the bank said on April 9.


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