The interaction between the Renewable Fuel Standard, drought and hunger

An article in the Opinion section of the Wall Street Journal (August 11, 2012) describes the Renewable Fuel Standard (RFS, which requires use of 13 billion gallons of ethanol based fuel this year and 36 billion gallons by 2022) and its use of 40% of corn output in 2011. With drought causing a 13% drop in corn yield, the diversion of food to fuel has been opposed by international food agencies. Should this act be relaxed to compensate for the lower corn crop yield, and to keep food prices from rising due to low supplies ? Should the EPA’s mandate to consider “impact on human health” consider the health impact of higher food prices globally and the impact of RFS? Will relaxing the standard increase costs for automakers whose capacity and production plans rely on the Federal commitment to ensure ethanol availability?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues, Sustainability and tagged , , , , , . Bookmark the permalink.

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