Krugman and Ethanol

Paul Krugman, the famous trade economist who must have inspired a 1000 PhDs including mine on trade and industrial restucturing (with a bit of incresaing returns and new economic geography liberally thrown in) now comments on Ethanol.

This also links to a recent discussion I had with David Maddison about the real costs of Ethanol as an alternative fuel.

As a sceptic is it good to see old Kruggy's take on it. Spot on.

Article is subscription. This is the Gristmill take on it.

Krugman gets to the heart of the (ethanol) matter

The Economist's View article is Paul Krugman: The Sum of All Ears.

Here is a Krugman quote:

Subsidizing ethanol benefits two well-organized groups: corn growers and ethanol producers (especially the corporate giant Archer Daniels Midland). As a result, it's bad policy with bipartisan support. For example, earlier this month legislation calling for a huge increase in ethanol use was introduced by five senators, of whom four, including presidential aspirants Barack Obama and Joseph Biden, were Democrats. In a recent town meeting in Iowa, Hillary Clinton managed to mention ethanol twice, according to The Politico.

Meanwhile, conservation doesn't have anything like the same natural political mojo. Where's the organized, powerful constituency for tougher fuel economy standards, a higher gasoline tax, or a cap-and-trade system on carbon dioxide emissions?

Can anything be done to promote good energy policy? Public education is a necessary first step, which is why Al Gore deserves all the praise he's getting. It would also help to have a president who gets scientific advice from scientists, not oil company executives and novelists.

Full aticle is worth reading.