The Trouble With Ethanol

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25 Apr 2008 11:07 am

There is little the U.S. government can do to make gasoline less expensive and nothing it can do about the weather in Australia. The production of ethanol, on the other hand, is directly related to government policies that subsidize it and require its use in gasoline. Absent government intervention, there would be little demand for ethanol. It has a lower energy content than gasoline, it is not significantly cheaper, and it is more difficult to transport to points of sale.

I have to say that the impact on carbon emissions of ethanol has changed my mind about this. This subsidized fuel is actually hurting the climate. That wasn't the intention, of course. But it has become the result. And it has also helped tip millions of the poor across the planet into a bare-knuckled fight for affordable food.

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