Biofuels at What Cost: Government Support for Ethanol and Biodiesel in the United States
Policy Incentives - Technical ReportAuthor: Koplow, Doug
Author Affiliation: The Global Subsadies Initiative
Submitted: Sat, 04/12/2008 - 02:06
Edited: Tue, 07/08/2008 - 18:22
Published in: The Global Subsadies Initiative on 1159660800
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Copyright Status: free to download Description:
Government subsidies-at both the state and federal levels-have long played an important role in the expansion of the biofuels industry in the United States. Liquid biofuels have been subsidized largely on the premise that they are domestic substitutes for imported oil, they reduce greenhouse gas (GHG) emissions, and they encourage rural development. Critics of subsidization have argued that the production process of these fuels is itself fossil-fuel-intensive, obviating many of the benefits of growing the energy resource, and that there are less expensive options for both GHG mitigation and rural development.
This analysis examines current and historical government support for ethanol and biodiesel in the United States. The authors have cataloged hundreds of programs now in place to subsidize nearly every stage of the ethanol and biodiesel supply chains at the federal, state and, to the extent possible, local level. Government actions have spanned a broad mix of policy types (grants, tax breaks, lending and credit enhancement programs, regulatory mandates, and funding for research). Programs have targeted multiple points in the biofuels production cycle, including inputs to production, conversion, distribution and retailing, and consumption. Virtually every production input and production stage of ethanol and biodiesel is subsidized somewhere in the country, and in many locations, producers can tap into multiple subsidies at once.
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