Sunday, January 30, 2011

The Law of Unintended Consequences

In my 30+ years of educational administration I saw firsthand how the law of unintended consequences works. People make decisions without fully comprehending all the ramifications. As a result, actions taken to solve one problem lead to more serious problems that were totally unforeseen and unexpected...but that become obvious in hindsight.

So what does this have to do with the Middle East? Simply this. Could the current riots in the Middle East have been caused, in part, by our attempt to become less dependent on Middle East oil? Let me explain. In 2007 the price of oil began a two-year rise that took it from $45 a barrel to $147 a barrel. One reaction to the rise in oil prices was a rush toward biofuels. President Bush and Congress committed to slashing fossil fuel consumption 20% by 2017, in part by generating 35 billion gallons of alternative fuels. America jumped on the biofuel bandwagon, and within two years 25% of all U.S. grain crops were being used to produce ethanol.

Now comes the law of unintended consequences.

The diversion of grain to ethanol resulted in a grain shortage...and a corresponding spike in grain prices. This shortage has been further compounded by weather problems in grain producing countries like Russia, Australia, and the United States over the past few years which reduced the total harvest. Grain production dropped while an ever-higher percentage of the grain that was harvested was used to produce ethanol. And the result has been rising food prices.

We see the impact on our grocery bill as a minor irritation. But for those living in poverty in countries like Egypt, Algeria, Tunisia, Jordan, Iran, or Syria these rising prices make life's basic necessities unaffordable.

And that leads to riots!

No comments:

Post a Comment