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Allow Free Market to Inform Proper Level of Ethanol Use
Posted By Conn Carroll On May 16, 2008 @ 11:44 am In Energy | Comments Disabled
Domestically produced corn based ethanol has enjoyed preferential federal treatment for years including a $0.51 per gallon tax credit and tariffs that discourage potentially cheaper sugar cane-based ethanol from Brazil. Federal government government support for ethanol has only increased in recent years with the first ever renewable fuel mandate for gasoline in 2005 and the significant raise of the mandate in 2007. Few in Washington predicted the costs of this government interference in the energy market, but now they are beginning to be widely accepted. Heritage scholars Ben Lieberman and Nicolas Loris identify  elements of the growing consensus including:
Lieberman and Loris conclude:
It should be noted that there is little to no downside risk in repealing the ethanol mandate, as well as the generous tax credits and protectionist tariffs that also tilt the playing field in favor of corn ethanol use. To the extent that there is a valid economic case for fuel ethanol, it will continue to be used even in the absence of government dictates and incentives.
Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2008/05/16/allow-free-market-to-inform-proper-level-of-ethanol-use/
URLs in this post:
 identify: http://www.heritage.org/Research/EnergyandEnvironment/wm1925.cfm
 study: http://www.ces.purdue.edu/extmedia/ID/ID-346-W.pdf
 has acknowledged: http://www.npr.org/templates/story/story/php?storyId=89545855
 study: http://www.ifpri.org/pubs/fpr/pr18.pdf
 argues: http://www.oxfam.org.uk/applications/blogs/pressoffice/2008/04/oxfam_and_care_call_for_fundam.html
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