Cbo_ethanol From the Director's Blog:

Over the past several years, spurred by both rising gasoline prices and long-standing subsidies for producing ethanol, the use of ethanol as a motor fuel in the United States has grown at an annual average rate of nearly 25 percent.  U.S. consumption of ethanol last year exceeded 9 billion gallons–a record high.  CBO released a paper today that discusses the relationship between ethanol, greenhouse-gas emissions, food prices, and federal spending on nutrition programs. ...

CBO estimates that the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices between April 2007 and April 2008. ...

Last year the use of ethanol reduced gasoline usage in the United States by about 4 percent and greenhouse-gas emissions from the transportation sector by less than 1 percent. The future impact of ethanol on greenhouse-gas emissions is unclear. Research suggests that in the short run, the production, distribution, and consumption of ethanol will create about 20 percent fewer greenhouse gas emissions than the equivalent processes for gasoline. In the long run, if increases in the production of ethanol led to a large amount of forests or grasslands being converted into new cropland, those changes in land use could more than offset any reduction in greenhouse-gas emissions—because forests and grasslands naturally absorb more carbon from the atmosphere than cropland absorbs.

Since ethanol subsidies (a) will worsen climate change in the long run (and it is a long run problem!) and (b) have the unintended consequence of raising food prices, can we remove them, like, soon?


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