What's for dinner: Biofuel or food?

The model of the way humans behave with respect to their planet will burst one a day, and the ramifications will be far more serious than the bursting of any financial bubble, says Prof. Yehuda Kahane, head of the Akirov Institute for Business and the Environment at Tel Aviv University (TAU). In ecological terms, the world's inhabitants consume 30 percent more than they are capable of producing, due to population growth and energy consumption. But contrary to humans, who can take loans or sell assets to consume more than their resources allow them to consume at any given time, Earth doesn't have anyone to lend it oxygen, water and food, explains Kahane, who will chair a session on business opportunities in renewable energies at the TAU and TheMarker "Renewable Energy and Beyond" conference, which begins tomorrow.

Kahane says: "In recent decades, economics studies have gotten us used to seeing our shared property - the atmosphere, the water, natural resources, fauna and flora - as something to be taken for granted. When determining the value of a forest, for example, the common practice is to calculate the quantity of wood that can be produced from it, and to ignore its value as a factor that reduces carbon dioxide levels, an aesthetic element and a habitat for flora and fauna. This is a faulty model that cannot continue to be used as the basis for action. Anyone who assumes possession of part of this joint property will have to pay the cost that it entails. For now, methods are developing in the world that will enable such calculations to be made."

The famine crisis which is now of great concern around the world illustrates the problematic nature of the traditional economic models Kahane is referring to. "Land and water used in the past to grow food have been allocated for crops used to produce different types of biofuels, and the result has been an increase in food prices that today threatens quite a few countries. Feasibility studies of projects must take into account the costs which, in the past, we used to overlook. We must decide what we want to consume - automotive fuel or food?"

This is also true of renewable energy, one of the areas that the conference will focus on. "Not all renewable energy is totally 'green,'" Kahane explains. "Wind turbines, for example, disrupt scenic panoramas, are often a source of noise pollution and harm fauna in their vicinity, such as birds. When calculating costs, a zero cost is affixed to birds, but it should not be forgotten that animals are part of the food chain, and the elimination of one species affects other species of flora and fauna. The elimination of fauna will also affect our ability to learn and develop things. Geckos, for example, which run along ceilings without falling, served as the basis for the development of new types of glue."

Kahane stresses that his remarks are not be interpreted as an objection to developing alternative sources, but as a call to make decisions that take into account other environmental factors. For example, when it comes to solar energy in Israel, the number of hours of sunlight is 60-70 percent larger than in most European countries, and therefore using solar energy on a large scale is a necessity. But even solar energy is not completely green because its installations and equipment take up large swathes of land; erecting solar facilities on unused land cannot be done for free.

The price of land should be determined not according to its value for construction purposes, but according to its environmental value, Kahane suggests. Therefore, it is preferable to use land that has no other purpose - such as water and sewage reservoirs - for photovoltaic cells (devices used for producing electrical energy via absorption of the sun's rays), for producing huge quantities of electricity, he says.

Kahane adds that Israel has a big incentive to try and reduce consumption of fossil fuels (i.e., those produced from fossilized organic substances in environments without oxygen). Apart from the pollution and increased cost of products and services, the heightened use of fossil fuels strengthens our enemies, he notes. In the last year and a half, the oil-producing countries, some of which are not friendly toward Israel, profited from the increase in the price of oil to over $90 a barrel. This amounts to more than $9 billion a day or over $3 trillion a year. If we build a single pile of $1 bills to represent this sum, it would reach a height three times or more the distance between the earth and the sun, Kahane explains.

Furthermore, he says to sum up, the governments of the oil-producing countries have a clear interest in investing the cash they have accumulated in other places, so as not to promote inflation in their countries. And indeed, nowadays this money is being used to acquire control over the world's mighty financial network.