[P]alm-oil prices have been climbing -- about 35% between January and November this year. And as prices have surged, some companies are planning to build or invest in biodiesel plants, with one recent study estimating there is enough refining capacity under development to produce as much as 20 million metric tons of fuel annually by late 2008. Such capacity, more than twice that of today's levels, would "easily soak up" all the world's available palm oil -- creating demand for even more plantations.

But palm-oil production comes at a cost, critics say, highlighting a troubling side of the world's alternative-energy boom: In Indonesia and Malaysia, forests are being slashed for new energy-yielding crops. Fires set to clear forest land in Borneo and Sumatra spew millions of tons of carbon dioxide and other greenhouse gases into the atmosphere, exacerbating the very global-warming concerns biofuels are meant to alleviate and blanketing large swaths of Southeast Asia in smog.

This story sounds remarkably similar to the impact on U.S. agriculture and our farming communities as a result of the increase in ethanol production, which I wrote about in October. The benefits of using biodiesel may still outweigh the costs, and the fuel may be a less harmful alternative to pure fossil fuels. The issue in my mind remains – there is no magic solution to our energy needs. The sustainability of any energy source depends not on exploration and development but on changing our relationships with those activities in our lives that consume the most energy, with the car at the top of the list.

Last month, I also criticized the concept of purchasing carbon offsets for polluting behavior. My point was not to discourage investments in alternative energy projects, which most carbon offset programs do. My issue was that the carbon offset programs can not be a substitute for real change in carbon emitting behaviors. Now comes another critical analysis of these programs. This analysis studied the effectiveness of carbon offset programs at encouraging or seeding new alternative energy projects. The logic of the analysis is that in order for carbon credit programs to truly “offset” carbon emissions, they need to reduce carbon emissions somewhere else on the planet. The conclusion of the study is that most money raised through these programs is invested in existing alternative energy projects or ones that would have been completed even without the additional investment from these programs. The implication is that the money isn't buying any incremental reductions in emissions to offset new carbon emitting behavior.

The voters of California rejected an initiative on the ballot last month that would have invested billions in alternative energy projects. The funds would have been raised from an additional tax on gas prices. Voters may have feared a potential increase in gas prices. The Economist, however, believes those fears were unfounded and suggests the problem lies with the alternative energy industry itself:

What really should have had Californians worried was the other half of the proposition: funnelling proceeds from the tax to renewables, or any other fad. American officialdom is getting more and more prone to attempts at pre-empting the market and fostering technologies that it thinks appropriate to address some problem or other. Earlier this year California’s energy watchdog signed off on a plan to spend almost $3 billion subsidising solar panels. Last year’s federal energy bill awarded a similar sum to nuclear power. Less fashionable forms of electricity generation, such as geothermal power, have lost government funding, though they are every bit as clean as wind power or solar power.

I don’t necessarily agree with The Economist’s characterization of the alternative energy industry as fadish, but I do believe that basing our efforts to reduce our fossil fuel dependence on switching to alternative fuel sources may create as many problems as it solves. Changing the behaviors that consume the most energy needs to be a goal separate and apart from the widespread adoption of alternative energy sources.