In my opinion, the United Nations is an ineffective talking shop that is an utter waste of time and money. I believe it is just a gravy train for delegates who get to use their huge expense account at nice restaurants overlooking the East River rather than a forum providing real solutions to the world’s practical problems. It needs a complete rethink.

I formed this view through observing the body on field operations in Tanzania at the time of the Rwandan genocide (if you are ever going to give money to an aid agency - then give it to the excellent Médecins Sans Frontières) and also because I feel that the contempt held for the organisation by the US government means it will never be truly effective.

Indeed, those of you with an interest in history will recall that America’s refusal to join the League of Nations in the inter-war period doomed that organisation to failure as well. It’s funny how history seems to repeat itself, isn’t it?

Anyway, I am open-minded enough to listen to what they have to say and, I must admit, having a quick flick through the main points of a report they released on Tuesday about biofuels left me full of shock and awe. I actually agree with everything it is saying - and I applaud the organisation for getting it right; this time.

Targets at risk

Of course, everyone may just ignore what it says – as usual – but I think it an important step in driving this message home. The biofuels frenzy that has been gripping the world has resulted in governments all over the world setting targets for biofuels as part of their “green energy” policies.

In Europe, we are targeting 5.75% of fuel to come from biofuels buy 2010, with 10% by 2020. The US Congress is also working on a proposal that would increase production of biofuels sevenfold by 2022. This is, obviously, going to drive gains in the sector.

But I really believe there is a risk that government could pull the rug from under the feet of investors in the sector at some point in the future and either slash or abandon these targets. I do not believe that biofuels are a “green” alternative. In fact, I think biofuels will be very damaging indeed.

The UN report said that bioenergy represented an "extraordinary opportunity" to reduce greenhouse gas emissions. However, "rapid growth in liquid biofuel production will make substantial demands on the world's land and water resources at a time when demand for both food and forest products is also rising rapidly."

“Changes in the carbon content of soils and carbon stocks in forests and peat lands might offset some or all of the benefits of the greenhouse gas reductions.”

"Use of large-scale monocropping could lead to significant biodiversity loss, soil erosion and nutrient leaching."

"Liquid biofuel production could threaten the availability of adequate food supplies by diverting land and other productive resources away from food crops"

It also conceded that the diversion of food crops for fuel will increase food prices thereby putting a strain on the poor. (Just look at the recent steep rises in the price of food staples maize and sugar).

I simply do not believe that chopping down the rainforests of Malaysia and Indonesia is a “green” way of solving our current energy crisis. Climate change is a real issue, but it is not the only environmental issue we face. Rather than being a global panacea, I see biofuels working on a smaller scale in poorer counties, with Brazil being the daddy of them all.

Brazil is globally the lowest cost producer of sugar and bioethanol. Its massive sugar cane industry means that it can cost-effectively produce the fuel without chopping down (even more of) the Amazon forest. But what works for Brazil may not work elsewhere – that’s why governments should not focus on one particular area with strict targets.

Biofuels will never be able to provide all of the West’s power without utterly destroying the planet. I really believe that. And that’s why I believe the only practical “green” way forward is nuclear power – despite Greenpeace’s view that it is a “dangerous distraction.”

I am a practical man and I believe it is not a distraction. There is give and take with everything and the benefits and risks have to be weighed up. Let’s hope it doesn’t take the entire deforestation of Indonesia to convince the tofu-munching sandal brigade that biofuels as a global solution to the greenhouse gas problem are a bad idea. That would be an utter tragedy for us all. P.S. If you enjoyed this article then sign up for Smart Commodities UK. It’s dedicated to searching out the investment trends that could provide our biggest profit opportunities for the next decade…

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