Greece burns

The recent tragic forest fires in Greece got me thinking. Yes, global warming is playing a part in this. For instance, two years ago there were huge, deadly fires in Portugal, Spain and Greece.

But surely there are other, economic factors at play. This article in The Economist lays out some of them. Developers are under suspicion for starting some fires to clear forest for construction, a result of the inefficient justice systems and weak property rights in many Mediterranean nations. It even seems that "productivity pay" for firemen may not be a good idea, as some seek to "encourage" demand for their services.

There is another intriguing angle. While the word "forest" conjures images of untouched wilderness, in reality forest in many parts of the world (and certainly in the heavily populated Mediterranean basin) have been shaped by man for ages. People cleared undergrowth for pasture and fuel, which in turn greatly reduced the risk of fires. However, rural depopulation is cutting this link between man and tree (see here), increasing the risk of fires.

Of course, the European Unions policies often don't help. Its generous agricultural subsidies are oriented to large-scale intensive farming and reforestation schemes often involve non-native species that involve highly flammable trees (eucalyptus, certain pines).

In the end, what do you do? Encourage once again the traditional agricultural practices to reestablish the previous equilibrium? I doubt that many people would like to be shepherds, even if heavily subsidized. Or do you just let the fires burn and wait until a truly wild native forest slowly establishes itself?

Biofuel madness

It's amazing how the biofuels bandwagon has kept gaining strength despite the fact that it's one of the main factors behind the steep rise in food prices. (Note to The Economist: remember that oil is used to grow crops!).

People have tolerated this because biofuels have a warm, green image (not deserved in many cases). Who can possible be against the environment?

But its pretty clear that biofuels serve mostly one purpose: to benefit incumbent politicians. On production cost grounds, biofuels make no sense, with the possible exceptions of sugarcane and jatropha. Politicians love to subsidize non-viable industries with a good public image becase 1) not many objetct lest they be called anti-environment and 2) those subsidies come back as campaign contributions from agribusiness (which has no choice, given that it wouldn't exist without those politicians).

In other words, politicians subsidize themselves. Rent-seeking at its most perverse worst.