Another reason to end ethanol subsidies and mandates: they spur inflation
The federal government’s years-long love affair with ethanol has cost taxpayers and drivers billions of dollars, while utterly failing to curb the nation’s oil consumption.
Later, ethanol was touted as a way to reduce greenhouse gases, saving the planet from noxious CO2 emissions and a blazing hot future. That’s been a failure, too, with farmers growing more corn to meet ethanol requirements. All that extra farming has resulted on more emissions.
Turns out there’s something ethanol has done to Americans: it’s boosted inflation for basic crops:
Greenhouse gases weren’t the only thing the RFS drove up—prices for major crops rose significantly over the eight years covered in the study. Unsurprisingly, corn was the most affected, with prices rising 30 percent as a result of the ethanol requirement. Yet there was significant spillover, too. With corn demand up, wheat prices rose 20 percent, and soybean prices increased 19 percent.
Expanding biofuels production would only add to the inflation, the researchers found. “Our estimates imply that for every billion gallons per year (BGY) expansion of ethanol demand, we would expect a 5.6% increase in corn prices; 1.6 and 0.4% increases in the areas of US corn and cropland, respectively; and attendant increases in GHG emissions, nutrient pollution, and soil erosion,” they wrote.
There’s a way to end this endless train of failures: stop the ethanol subsidies and mandates. That might be unpopular with primary voters in the cornbelt, but it will please consumers nationwide.