Current Ethanol RegulationClean Air Act 1977 Amendments 1990 AmendmentsFuel Additive and Fuel Registration E15 RegistrationE10 RegulationE15 Regulation
Offsetting CostsNet Gain in Consumer Welfare (Assumed)Incentives (Federal Incentives)
Additional Costs: Agricultural IssueInterconnectedness of Food Market and Fuel Market Raises costs of crops Commonly seen as a demand issue
My QuestionQuestion: Is bioethanol a viable and good solution?Viable: SustainableGood: Increases net social welfareTerminology:HectareLand Grabs
Supply Side Approach (MyArgument) S’ S Bioethanol is another industry and has different costs. The supply curve is also the marginal cost curve of an industry Incentives for Land Grabs by ethanol corporations Land Grabs reduce supply of land for agricultural purposes D
Demand Side Approach (Consensus)Bioethanol increases demands for Scertain cropsAgricultural food suppliers also supplyfuel industries with cropsNo division in suppliers betweenmarkets, entirely a demand issue. D D’
What does this result in?Higher Food PricesLower Gas Prices (My Argument)Evidence? Food Crisis of 2008 GFRP
Is this worth it?Do the social costs of pollution offset the resulting costs of bioethanol?What are the alternatives?