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One of the World's Great Bad Ideas

March 15, 2011, 4:25 pm

Corn ethanol

The United States spends about $6 billion a year on federal support for ethanol production through tax credits, tariffs, and other programs. Thanks to this financial assistance, one-sixth of the world's corn supply is burned in American cars. That is enough corn to feed 350 million people for an entire year.

Government support of rapid growth in biofuel production has contributed to disarray in food production. Indeed, as a result of official policy in the United States and Europe, including aggressive production targets, biofuel consumed more than 6.5 percent of global grain output and 8 percent of the world's vegetable oil in 2010, up from 2 percent of grain supplies and virtually no vegetable oil in 2004.

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Category: Energy, Environment
  • Don

    I better NEVER hear a tree hugger call me cruel and heartless. These people are killing people by the millions, they are no better than Stalin and Mao.

  • http://www.aguanomics.com David Zetland

    It's lose-lose-lose-lose ($, environment, corn prices, crop mix) -- all for two sets of winners: seed sellers/corn processors and politicians who receive their donations. (The farmers who grow corn don't keep much of that money.)

    Many more comments here: http://www.google.com/search?q=ethanol&sitesearch=aguanomics.com

  • Nate Ogden

    6 billion of credits means 4.2 billion wasn't spent on ME oil. If that money was instead spent on seeds, farm equipment, or farmer income it stayed in our national GDP. Studies I have read say money turns over 7 to 20 times meaning it created additional GDP of 28 to 80 billion. Federal government takes in 16%? of GDP in taxes meaning it potentially created 4.48 to 12.8 billion in income.

    I'm seldom a fan of any government program but this is one of the few times it makes sense. Any money we keep out of the Middle East and keep here is beneficial for more reasons then just economic.

    As to food we are no where close to our growing capacity for corn or any grain. If there was a market, world or national, for more corn we could easily grow it with 9 months notice. The low price of corn was a much more real cap on production then ethonol. Why grow more corn if you still don't make any money on it?

  • BG

    A great movie on this topic is King Corn. My favorite part is the filmmakers talking to some old salt of the earth Iowa corn farmer who laughs at the idea that he would be growing corn if the government didn't pay him to do it.

  • stuhlmann

    Here in Germany, they just (as of 1 January) introduced a mandated 10% ethanol gasoline mixture. Gasoline without the ethanol is still available, but at a higher price. Overall, the Germans are not taking to this well - not seeing the need for this and also worrying that the ethanol will be bad for their cars. Being an American and used to driving with an ethanol blend in the tank, I'm not worried about the the alcohol being bad for my car - unless it was made from genetically modified grain.

  • http://lorenzo-thinkingoutaloud.blogspot.com/ Lorenzo from Oz

    I found the Will to Believe among the commenters on Lomborg's piece quite striking.

  • Ted Rado

    The most elementary calculations show that if all the corn grown in the US was converted to ethanol, it would net out to about 250,000 bbl/d gasoline. Meanwhile, the ag economy is screwed up, people starve, etc. Any third year chem eng student could have figured this out, but not the morons running our country. What is sais that polticians of both parties from the corn states support the subsidies. Is there an honorable person remaining in the US Condress? Apparently not.

    All the other "alternative energy" schemes are political schemes that can easily be shown to be nonsense on a large scale. Why do we keep our fingers firmly pressed on our self-destuct button? Does zealotry trump everything?

  • Nate Ogden

    "Meanwhile, the ag economy is screwed up, people starve, etc."

    Who is starving? No one is suffering for lack of food.

  • http://hertzlinger.blogspot.com Joseph Hertzlinger

    Isn't ethanol fermented and distilled from corn syrup? Corn syrup resembles molasses, an accident waiting to happen.

  • Graeme

    ethanol production also consumes palm oil and hence orang-utan habitat.

    http://www.orangutan.org.au/430.html

    Greens kill what they claim to protect.