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THE ECONOMICS OF GASOHOL
Author(s) -
PRYOR FREDERIC L.
Publication year - 2009
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2009.00160.x
Subject(s) - non renewable resource , economics , gasoline , natural resource economics , production (economics) , consumption (sociology) , environmental pollution , renewable energy , environmental science , microeconomics , waste management , environmental protection , engineering , social science , sociology , electrical engineering
Gasohol has received considerable governmental financial support because it is alleged to have important ecological and economic advantages. It is, for instance, supposed to reduce our extraction of nonrenewable energy, to have a cost advantage over gasoline, and to reduce pollution. This essay presents evidence that the amount of nonrenewable energy used in producing the corn ethanol is less than the amount of energy it provides as a fuel, that its price competitiveness with gasoline is doubtful, and that its environmental benefits are far from proven. In brief, current U.S. policies encouraging ethanol production to produce gasohol do not seem economically rational. ( JEL Q100, Q400, D210, L780)