Does corn for ethanol help, or hurt the environment? Is it a politically-driven short-term hot button or a real long-term solution? Tough questions all, and the answers, according to a speaker at a recent CME Group webcast “generate much more heat than light.”

Ian Goldin, former vice president of the World Bank and currently director of Oxford University’s Oxford Martin School, wasn’t particularly enamored of corn for ethanol, believing it falls flat on three fronts — food versus fuel, environment and economics.

“It’s absolutely clear that corn ethanol in the United States and Europe is driving up food prices. The only question is how much. Studies have shown a range of impact on food prices of 30 percent to 50 percent. The problem with the food versus fuel energy discussion is that it generates much more heat than it does light. The devil is in the details.”

Goldin says carbon and environmental impacts from using food commodities for fuel can be minimized as long as commodities are not grown in new soil. “But as we consider the doubling of ethanol production over the coming year in Europe and the United States, and as Brazil moves production into marginal forests, then you get increases in carbon dioxide emissions and greenhouse gases, not decreases.”

Goldin also lambasted the use of subsidies to achieve biofuel targets. “It’s $7 billion a year in the United States and $5 billion a year in Europe. It will be moving up to about $25 billion combined going forward. It is a lawyer’s and lobbyist’s dream, and an economist’s nightmare.”

Goldin noted that the Organization for Economic Cooperation and Development has projected price increases in several commodities over the next five years due to biofuel policies — a 42 percent increase in coarse grain prices, a 34 percent increase in oilseeds and a 27 percent increase in wheat prices.

Tim Gallagher, executive vice president, grain and biofuels, Bunge North America, says Bunge “supports global biofuel development,” as long as the world can maintain a balance between production and consumption of corn.

“A lot of things have changed since 2008, when it was such a big debate,” Gallagher said. “Back then, we had a big increase in the mandates, and we saw some price impacts. But since then, the markets have figured out how to accommodate the demand shock that came from corn being used in ethanol production. We got more acres, better technology from a seed perspective and higher yields.”

Despite this, Bunge has taken a cautious approach relative to biofuels, according to Gallagher. “We’ve made a significant investment in sugar ethanol in Brazil, but our investments in the United States have been relatively modest.”