Of course, the federal government is driving this demand for ethanol. The 2005 and 2007 energy bills mandate U.S. blenders sell a certain amount of ethanol. The effect: we're running low on corn, which is bad news for ranchers, and anyone else who uses corn, beef, or anything that competes with corn for land—that is, bad news for everyone except for a few folks getting rich off ethanol.
It’s also arguably bad news for environmentalists who want less land clearing worldwide: As The New York Times noted in a 2008 report on the side effects of bioful subsidies, research shows that “the purchase of biofuels in Europe and the United States leads indirectly to the destruction of natural habitats far afield.” That, in turn, has significant negative effects on the world food supply. Rather than growing food to eat, many farmers end up growing fuel to burn.
Nor, according to the Times, do those biofuels provide other alleged environmental benefits:
These plant-based fuels were originally promoted as better than fossil fuels because the carbon released when they were burned was balanced by the carbon absorbed when the plants grew. But even that equation proved overly simplistic because the process of turning plants into fuels causes its own emissions—for refining and transportation, for example.
Most of this has been well established for years. Even former vice-president Al Gore, who once defended the subsidies, finally admitted not long that they are “not good policy,” and that they are largely driven by political pandering. Sadly, Congress has yet to ditch this corny idea.
Read Reason’s Ron Bailey on why ethanol subsidies must die.