CBO catches up with CEI on ethanol

Well.  The Congressional Budget Office has finally caught up with what CEI has been saying for years –  misguided ethanol policies cause higher food prices without providing significant environmental benefits.  In a report released yesterday, CBO noted this about food prices:

CBO estimates that the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices between April 2007 and April 2008.

And what about ethanol’s highly touted reduction of  greenhouse-gas emissions? Here’s what CBO found:

Last year the use of ethanol reduced gasoline usage in the United States by about 4 percent and greenhouse-gas emissions from the transportation sector by less than 1 percent.

In the long run, if increases in the production of ethanol led to a large amount of forests or grasslands being converted into new cropland, those changes in land use could more than offset any reduction in greenhouse-gas emissions—because forests and grasslands naturally absorb more carbon from the atmosphere than cropland absorbs.

Dennis Avery in a 2006 CEI study pointed this out,  as did this CEI 2007 report on unintended consequences of ethanol policy.  Also see CEI’s website on ethanol.