Ethanol: No Free Lunch
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Andrew Schmitz
The sharp rise in energy prices in the 1980s triggered a strong interest in the production of ethanol as an additional energy component. Economists are divided as to the payoffs from ethanol derived corn in part because of the complex interrelationship between energy produced from ethanol and energy from fossil fuels. Using a welfare economic framework, we calculate that there can be treasury savings from ethanol using tax credits as these subsidies can be smaller than direct payments to corn farmers which are essentially eliminated from the expansion of ethanol. Also, to the extent that ethanol dampens fuel prices there can be a net welfare gain from ethanol production in the presence of ethanol subsidies.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Article
- Explorations in Biofuels Economics, Policy, and History: Introduction to the Special Issue
- Policy Alternatives for the Future Biofuels Industry
- Ethanol: No Free Lunch
- Fuel Ethanol Subsidies and Farm Price Support
- Estimating the Welfare Effects of U.S. Distortions in the Ethanol Market Using a Partial Equilibrium Trade Model
- Ethanol Expansion in the Food versus Fuel Debate: How Will Developing Countries Fare?
- European Union Policy on Bioenergy and the Role of Sustainability Criteria and Certification Systems
- Biofuels Policies in Asian Countries: Impact of the Expanded Biofuels Programs on World Agricultural Markets
- Potential Land Use Implications of a Global Biofuels Industry
- Technical and Financial Feasibility Analysis of Distributed Bioprocessing Using Regional Biomass Pre-Processing Centers
- Fueling the Automobile: An Economic Exploration of Early Adoption of Gasoline over Ethanol
Articles in the same Issue
- Article
- Explorations in Biofuels Economics, Policy, and History: Introduction to the Special Issue
- Policy Alternatives for the Future Biofuels Industry
- Ethanol: No Free Lunch
- Fuel Ethanol Subsidies and Farm Price Support
- Estimating the Welfare Effects of U.S. Distortions in the Ethanol Market Using a Partial Equilibrium Trade Model
- Ethanol Expansion in the Food versus Fuel Debate: How Will Developing Countries Fare?
- European Union Policy on Bioenergy and the Role of Sustainability Criteria and Certification Systems
- Biofuels Policies in Asian Countries: Impact of the Expanded Biofuels Programs on World Agricultural Markets
- Potential Land Use Implications of a Global Biofuels Industry
- Technical and Financial Feasibility Analysis of Distributed Bioprocessing Using Regional Biomass Pre-Processing Centers
- Fueling the Automobile: An Economic Exploration of Early Adoption of Gasoline over Ethanol
