Wednesday, April 04, 2007

Democrats, Protectionism, Ethanol, and Cuba


If the United States wants to boost ethanol consumption and reduce oil-dependency, it needs to make a simple decision -- eliminate its 54-cents-a-gallon tariff. Experts tell us that corn-based ethanol, the kind being produced in the United States, is eight times less efficient than Brazil's sugarcane version of the biofuel. Alessandro Teixeira, Brazil's point man for his country's ethanol strategy, insists that "we are the world leader, and if people really want to benefit from our ethanol industry, they have to embrace it in practice, not in theory.'' Precisely because corn is much less efficient than sugarcane, the U.S. has been able to replace only about 3 percent of its oil consumption despite a huge government biofuel program....Castro's Enemy: The Ethanol Alliance, Alvaro Vargas Llosa, TCS Daily, 4/4/2007

Speaking of the ill effects of intervening in markets, Alvaro Vargas Llosa's article probably won't be printed to benefit the Democrat caucus in the House or the Senate. I hope Republicans are reading it. The Brazil story on energy is a fascinating one. They have made a decades-long, concerted effort to create an alternative to oil, because they don't have any. But -- guess who chose this? -- we have a tariff on importing biofuels from Brazil. Bart Simpson would make better trade policy.

Luther

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