The Washington Post reports:

It sounded like a good idea: Provide a little government money to convert wood shavings and plant waste into renewable energy.

But as laudable as that goal sounds, it could end up causing more economic damage than good — driving up the price of raw timber, undermining an industry that has long used sawdust and wood shavings to make affordable cabinetry, and highlighting the many challenges involved in decreasing the nation’s dependence on oil by using organic materials to create biofuels.

In a matter of months, the Biomass Crop Assistance Program — a small provision tucked into the 2008 farm bill — has mushroomed into a half-a-billion dollar subsidy that is funneling taxpayer dollars to sawmills and lumber wholesalers, encouraging them to sell their waste to be converted into high-tech biofuels. In doing so, it is shutting off the supply of cheap timber byproducts to the nation’s composite wood manufacturers, who make panels for home entertainment centers and kitchen cabinets.

This sounds a lot like the dumbest idea of 2009: “Cash for Clunkers.”  First, find a process that is relatively efficient (say, using leftover wood to make useful products, or, selling used cars to people who need them).  Next, make that process less efficient and more exciting (for instance, by taking the wood away from making useful products and instead using it in a relatively inefficient biomass-to-energy conversion, or, taking used cars and permanently immobilizing them so that no one will ever drive them again).  In both cases the government increases the price of products people need (wood products, cars) but claims it is doing something “green” while improving the economy.  Bogus.

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