The benefits and costs of ethanol an evaluation o

Authors: Robert Hahn Caroline Cecot

Publish Date: 2008/09/16

Volume: 35, Issue: 3, Pages: 275-295

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Abstract

Ethanol production in the United States has been steadily growing and is expected to continue growing Many politicians see increased ethanol use as a way to promote environmental goals such as reducing greenhouse gas emissions and energy security goals This paper provides a benefitcost analysis of increasing ethanol use based on an analysis by the Environmental Protection Agency We find that the cost of increasing ethanol production to almost ten billion gallons a year is likely to exceed the benefits by about three billion dollars annually We also suggest that earlier attempts aimed at promoting ethanol would have likely failed a benefitcost test and that Congress should consider repealing ethanol incentive programs such as the ethanol tariff and tax credit

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