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The Impact of Ethanol Policy on Social Welfare and GHG Emissions

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  • Lasco, Christine
  • Khanna, Madhu

Abstract

We develop a stylized model of fuel markets in an open economy to analyze the impact of ethanol policy on social welfare and greenhouse gas (GHG) emissions. The policies considered here include the $0.51 per gallon blender’s subsidy for ethanol and the import tariff of $0.54 per gallon on sugarcane ethanol. Our analysis shows that the combined subsidy and tariff policy decreases welfare by about $3.6 billion relative to a non intervention policy. Furthermore, there are no GHG mitigation benefits since GHG emissions show a slight increase (0.08%) when both policies are in place.

Suggested Citation

  • Lasco, Christine & Khanna, Madhu, 2008. "The Impact of Ethanol Policy on Social Welfare and GHG Emissions," Environmental and Rural Development Impacts Conference, October 15-16, 2008, St. Louis, Missouri 53494, Farm Foundation, Transition to a Bio Economy Conferences.
    • Handle: RePEc:ags:fftren:53494
    DOI: 10.22004/ag.econ.53494
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    Keywords

    Environmental Economics and Policy;

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