Yesterday's Wall Street Journal reported (link for subscribers) on how the boom in biodiesel and other renewable fuel sources is having unintended environmental consequences around the world. On the island of Borneo, for example, Indonesians are setting forest fires to clear land for palm oil plantations (palm oil can be used to make biodiesel). The result is a "thick haze" that envelopes neighboring communities, contributing to some of the same environmental problems biodiesel is supposed to solve.

The bluish smoke is at times so dense that it leaves the city dark and gloomy even at midday. The haze has sometimes closed Pontianak's airport and prompted local volunteers to distribute face-masks on city streets. From July through mid-October, Indonesian health officials reported 28,762 smog-related cases of respiratory illness across the country.

Other nations are clearing forests to make way for energy-producing crops as well, with consequent impacts on water and wildlife.

The biodiesel boom is part of a larger rush of investment into "alternative" energy sources. Many investors believe that the push for stringent measures to address air quality and climate change will signficiantly expand the market for alternative fuels and investing accordingly. Yet these investments are largely driven by expectations of what new environmental policies will require, rather than which energy sources represent a genuine environmental improvement. All energy sources have potentially negative environmental impacts, and not every "alternative" to carbon-based fuels represents an environmental improvement.