Abstract

http://ssrn.com/abstract=1027692
 
 

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The Benefits and Costs of Ethanol: An Evaluation of the Government's Analysis


Robert W. Hahn


University of Oxford, Smith School; Georgetown University

Caroline Cecot


Vanderbilt University - Law School

August 1, 2008

AEI-Brookings Joint Center Working Paper No. 07-17
Journal of Regulatory Economics, Forthcoming

Abstract:     
Ethanol production in the United States has been steadily growing and is expected to continue growing. Many politicians see increased ethanol use as a way to promote environmental goals, such as reducing greenhouse gas emissions, and energy security goals. This paper provides a benefit-cost analysis of increasing ethanol use based on an analysis by the Environmental Protection Agency. We find that the cost of increasing ethanol production to almost ten billion gallons a year is likely to exceed the benefits by about three billion dollars annually. We also suggest that earlier attempts aimed at promoting ethanol would have likely failed a benefit-cost test, and that Congress should consider repealing ethanol incentive programs, such as the ethanol tariff and tax credit.

Number of Pages in PDF File: 35

Keywords: benefit-cost analysis, regulation, energy policy, environmental economics, ethanol

JEL Classification: D61, D78, L50, Q48, Q5

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Date posted: November 8, 2007 ; Last revised: October 14, 2013

Suggested Citation

Hahn, Robert W. and Cecot, Caroline, The Benefits and Costs of Ethanol: An Evaluation of the Government's Analysis (August 1, 2008). AEI-Brookings Joint Center Working Paper No. 07-17; Journal of Regulatory Economics, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1027692

Contact Information

Robert W. Hahn (Contact Author)
University of Oxford, Smith School ( email )
Oxford
United Kingdom
Georgetown University
Georgetown Center for Business and Public Policy
Washington, DC 20057
United States
Caroline Cecot
Vanderbilt University - Law School ( email )
131 21st Avenue South
Nashville, TN 37203-1181
United States
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