The ethanol effect

It seems that everywhere you turn these days, ethanol is being touted as the best way to reduce our dependence on foreign oil. The U.S. Senate recently passed a bill calling for a huge increase in domestic ethanol production over the next 15 years. Auto makers and oil companies run feel-good commercials about their commitment to ethanol. And no leading presidential candidate dares deviate from the gospel of ethanol, thanks to the prominence of corn-producing Iowa in the nominating process.

Yet the public debate about ethanol has been pretty one-sided. We hear a great deal about the potential benefits and very little about the costs. But in economics, there's no such thing as a free lunch. Benefits never come without costs.

I will now start blogging here about ethanol.

Jason Berkes
www.jasonberkes.com