Yes, there certainly are a number of negative environmental consequences from crop-based biofuels. There's no question about that. The higher prices are stimulating more use of fertilizers and chemicals of various kinds, they're bringing in marginal pasturelands and so on for corn production, and they're stimulating monoculture. There are a number of unfortunate environmental consequences. There is the cutting down of trees in Indonesia and Malaysia to plant more palm trees to get palm oil for the biodiesel industry. There is a huge number of negative environmental consequences.
Certainly the greenhouse gas savings on corn-based ethanol and wheat-based ethanol are rather small. Even with biodiesel, where the savings are much greater, in fact studies show that if greenhouse gas reduction is your real goal, there are way cheaper ways of reducing greenhouse gas than using crops and oilseeds to produce fuel for our automobiles.
Studies show that it costs between $200 and $1,200 per tonne of greenhouse gas reduction. So if greenhouse gas reduction is your real primary reason for doing this, yes, you can get a little, but it's extremely expensive. As an economist, I can find all kinds of cheaper ways for $20 or $30 a tonne rather than $500 or $1,200 a tonne.
So I think greenhouse gas reduction is not a good reason for doing this. I think that energy security is not a good reason for doing this. And even in the U.S., where they are much more aware of this, they will not achieve anywhere near energy security by doing this. They sometimes say it's a piece of the puzzle, but it's a very, very insignificant piece of the puzzle.
So I think the arguments have to rest on it as being a farm program, and I think it's very effective as a farm program. Certainly the National Corn Growers Association in the United States, along with the American Farm Bureau, are very powerful and have been instrumental in pushing this forward. In Canada we have the grains and oilseeds groups, of course, also lobbying on this.
But I think it's a farm program that's going to be very expensive for Canadian society. We'll gain some benefits, but I think that for the same benefits we could do it a lot more cheaply.