Don’t bet the farm on it.
http://europe.theoildrum.com/node/2726/

http://www.ethanol-gec.org/information/briefing/16.pdf

Also it matters if the government subsidies went into capital plant. If government subsidies went into capital plant, then you’ve already have sunk costs, and the important factor is the marginal return.

I suspect that part of the reason that we don’t have spare capacity now is that during the 1990’s the trend was to get rid of the price supports that created excess agricultural capacity.

One other thing is that Harper’s Magazine wrote an article earlier this year saying that alternative energy was the next bubble.

So, _IF_ natural gas or coal were in unlimited supply, the production of corn ethanol could still make sense even if the overall process were a net energy loser (again, just from an energy standpoint).

Now, considering the real status of natural gas reserves, does it make sense to burn it for producing corn ethanol when natural gas has such essential uses as home heating & cooking and power generation?

And considering the real status of coal reserves, wouldn’t it be sensible to save it for power generation and for metallurgy?

Note that for Brazilian sugarcane ethanol these considerations do not apply because sugarcane bagasse is used to provide heat for distillation (and there is no fermentation step).

Note also that lack of natural gas or long blackouts have the potential to trigger catastrophic societal collapse in the next decades, in which case people will not worry about what the sea level will be in 100 years.

Paulson has suggested that China get more voice in the World Bank and IMF in exchange as something of a “carrot” for more flexible exchange rates. The problem here is that I just don’t see why China would want to have a greater voice in the IMF. Right now the IMF needs China more than China needs the IMF.

The IMF and World Bank both have had to adjust to new global economic realities, and the World Bank has positioned itself as something of a think-tank and laboratory for anti-poverty programs, and the World Bank is very heavily and usefully involved in projects like setting up a national health care system in China.

I’m not sure what the role of the IMF is. Now that everyone has huge reserves, there isn’t much need for the IMF to bail anyone out. Also, the IMF has gotten so much ill-will in the developing world from its “structural adjustment” programs of the 1990’s, that now that the developing world is getting on its feet, no one is particularly interested in working with the IMF.

Me neither. I can’t actually get my head around what Mundell is proposing or why China would favour it. I note he also thinks China would favour an Asian Currency Union and, indeed, a World Currency (which, I suppose, is just another way of thinking about the IMF plan…) I don’t think there’s anything to what he’s suggesting – at least, not from the Reuters report, which I made little sense of. I completely agree that no magic wand from the IMF is going to solve China’s currency issues. I don’t understand what Mundell is suggesting or why it would help. I would, however, suggest that some population of SAFE/PBoC officials are more than willing to suspend common sense when a Nobel winner tells them he’s got an easy out for them in his back pocket.