Our Econ 280 class just got through a spirited debate on ethanol policy (tough luck to the guy that drew “pro-ethanol”), that featured this piece from Hahn and Cecot. Certainly, the class seemed sympathetic to this change of heart from super-environmentalist, Al Gore:
“It is not a good policy to have these massive subsidies for first-generation ethanol,” Gore said at a green energy conference in Athens, Greece, according to Reuters. First generation refers to the most basic, energy-intensive process of converting corn to ethanol for use as a motor vehicle fuel additive.
On reflection, Gore said the energy conversion ratios — how much energy is produced in the process — “are at best very small.” “One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee,” he said, “and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president.”
If Hahn and Cecot’s benefit-cost analysis didn’t convince you, perhaps this bit of visual evidence will be persuasive (c/o Knowledge Problem). The first map is the votes on an amendment to an appropriations bill proposal to prevent EPA from encouraging sale of gasoline with higher ethanol content. The red represents votes opposing the amendment (pro-ethanol) and the blue represents the votes for the amendment.
The Knowledge Problem piece also points us to where the ethanol production comes from. My “ocular” regression seems to indicate a rather robust relationship between the production and the votes.
For more political geography, check out this post on climate legislation.
And if you think the politics is predictable, try out the economics. What happens when the demand for corn ethanol increases? One would suspect the price of corn increases, leading to more corn and a reduction in the supply of, say, soybeans.