at the Citizen Power Alliance 2010 Wind Conference
How new US biofuel legislation will subsidize oil consumption
|New U.S. energy legislation mandates the use of renewable fuel but calls for continuing current biofuel subsidies that will cost taxpayers billions of dollars. The subsidies -- tax credits -- by themselves encourage ethanol production as a replacement for oil-based gasoline consumption. Instead, the tax credits will play a major role in unintentionally subsidizing gasoline consumption. This contradicts the new energy bill's stated objectives of reducing dependency on oil, improving the environment and enhancing rural prosperity.|
Furthermore, this policy mistake is not unique to the United States but is a worldwide error of judgment as most countries use both mandates and tax credits simultaneously. The policy implication is clear: allow the mandate to work by itself, so eliminate the tax credits and save billions in taxpayer monies. This involves only a modest change in biofuel policy while dramatically improving policy achievements.
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posted by CITIZEN POWER ALLIANCE at 4:55 PM - permanent link
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