The Ethanol Lobby Never Loses

Both economists and climate experts agree that the biofuels tax credit is actually just a new subsidy for corn and soy farmers cloaked in the guise of emissions reduction. Experts at the R Street Institute, Princeton University, AEI and the World Resources Institute — an unusual coalition — all expressed profound frustration that the House would pass a bill with such “bad policy,” a phrase they all used independently. Taxpayers for Common Sense, several environmental groups and a U.S. consumer advocacy group joined R Street on a letter in May protesting the House changes.

“It’s a classic case of, Washington is trying to thread the needle on this tax bill. This is one of the more popular subsidies that they have, and so that’s why it’s been extended compared to the other ones,” said Philip Rossetti, an environmental economics researcher at the center-right think tank R Street. “The actual emissions or economic justifications aren’t really there.”