Economic and environmental impacts of U.S. corn ethanol production and use

Douglas G. Tiffany

Regional Economic Development, 2009, issue Apr, 42-58

Abstract: For many years, U.S. policy initiatives and incentives have favored the production of ethanol from corn. The goals have been to increase corn prices and farmer income, enhance rural employment through encouragement of value-added businesses, increase energy security, and produce additives and/or fuels capable of reducing tailpipe pollutants and greenhouse gases. The Energy Policy Act of 2005 established annual goals via a renewable fuels standard that would have increased production of ethanol and biodiesel to 7.5 billion gallons by 2012. That bill was superseded by the Energy Independence and Security of Act of 2007, which increased usage targets and specified performance standards for ethanol and other biofuels. The 2008 Farm Bill identified incentive payments for ethanol produced in various ways. The effects of these three laws have been magnified by rising crude oil prices, which helped maintain profits for corn dry-grind ethanol plants. This paper discusses environmental effects of corn ethanol production and use, energy balances of corn ethanol versus gasoline, subsidies for corn ethanol and gasoline, impacts of ethanol production on farmer decisionmaking, and effects of corn ethanol on food prices.

Keywords: Biomass energy - United States; Food prices; Environmental policy (search for similar items in EconPapers)
Date: 2009
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