The United States’ increasing reliance on corn ethanol is one of the most convoluted and wasteful government endeavors in the world. First we massively subsidize corn, then we massively subsidize ethanol production, then we massively tax imports of foreign ethanol from sugar. Result: little reduction in CO2 emissions, massive over-production of corn that destroys land and sea, anger from developing countries about our hypocrisy, and billions of dollars thrown down a rat hole.
Now, the Bush administration is working with the Brazilian government to expand Brazil’s ethanol technology around Latin America. While I think this too is a misguided policy, at least sugar cane is relatively efficient. But I worry about all the tropical rainforests that are going to be cut down so people can drive their SUVs.
Part of the deal includes a reduction in U.S. tariffs on sugar ethanol, and already politicians from corn states are up in arms. How dare corn farmers actually have to produce efficient products that have real environmental benefits! This is yet another example of how more often than not, trade protectionism has terrible environmental consequences, and makes bad policy even worse.