Should the Clean Air Act Be Used to Turn Petroleum Addicts into Alcoholics?

Abstract:     
This article suggests that the corn lobby, aided and abetted by the White House and Congress, has turned a pollution law into a program for subsidized profits. And, unfortunately, ethanol in gasoline is bad for the environment, too. The author concedes that a renewable fuels program should be an important part of a national energy policy. But it must be sustainable, and it should not be based on long-term government subsidies. The danger is that alternative energy programs are supported as a political substitute for programs that might actually reduce the growth of petroleum imports, because programs that might be effective are controversial. For now, Congress has provided billions of dollars for ethanol producers by mandating that gasoline must have a renewable fuel content, robbing the government of the funds it needs to develop far more promising alternative energy sources. The article concludes that this is the reverse of Robin Hood; it robs the average American and gives the proceeds to agribusiness.

Keywords: alternative energy, ethanol, national energy policy, carbon emissions, Renewable Fuel Standard, greenhouse gas emissions, Clean Air Act, Mobile Source Program, reformulated gasoline (RFG), MTBE

JEL Classifications: K23, K32, L95, L98, O38

Accepted Paper Series