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An economic analysis released February 25th shows major gains for the U.S. job market and GDP from 2007’s ethanol industry boom (emphasis added):
The analysis, conducted by John Urbanchuk of LECG, LLC, determined that the increase in economic activity resulting from ongoing production and construction of new capacity supported the creation of 238,541 jobs in all sectors of the economy during 2007. These include more than 46,000 jobs in the U.S. manufacturing sector. The goods and services required to produce the estimated 6.5 billion gallons in 2007 added $47.6 billion to the Gross Domestic Product and raised household incomes by $12.3 billion.
While the gains themselves aren’t all that surprising, they may turn the conventional wisdom that “ethanol subsidies are bad” on its head since increased tax revenue actually paid them off:
By Michelle Bennett •
February 18, 2008
Timothy Hurst recently wrote an article about U.S. Investors and renewable energy. This post is designed as a complement to that news story.
Renewable energy has attracted a lot of attention lately as the world looks for cleaner ways to power our world. Wind and solar stand as the most recognizable clean, green dynamos, but they still struggle to compete with traditional and entrenched power producers. True to conventional economic values, competition is everything. Yet, in the U.S.A. these technologies have survived in the dog-eat-dog industry for decades mostly without the aid of government subsidies (unlike coal and oil), and many claim that renewables could take off with just a little help from Uncle Sam. What are the obstacles? Are government subsidies the only saving grace for renewables? This post hopes to shed some light on the topic and burn through the conflicting noise that surrounds this fundamental and controversial industry.
It seems like I’m always reading articles about improvements, investments, and the promise of renewable energy. For a more practical perspective, I recently asked a successful businessman, who sometimes works with solar panels, for his opinion. Did he think that solar was going to boom in the next few years? His opinion was that the industry would need more government subsidies to really take off. Even with high oil prices, it was still simply too expensive to invest on a small scale. You might regain your initial investment in 15+ years in ideal conditions. Even in states with incentives to support renewable energy, it’s expensive. His view echoed my cousin’s frustration. Yet despite the initial cost, renewables are still an attractive option. As expensive as it may be to buy and install solar panels, it’s also very expensive ($1.8-billion and rising) to build a new coal-fired power plant with “clean coal” technologies. Hidden costs also plague coal power plants: the cost to clean up mercury emissions, the water required to operate, and in some places, the cost of carbon credits. Finally, the bottom line: how much does it cost to generate each kilowatt hour? Compare two graphs, one for coal and one for solar, and you may be surprised.
It looks like ethanol subsidies may impede efforts to reduce the size of the Dead Zone in the Gulf of Mexico. A draft report from the EPA Science Advisory Board says that ethanol subsidies could lead to a dramatic increase in nutrient loading in the Mississippi river basin, due to diverting cropland to corn production.
Recent energy policies, combined with pre-existing crop subsidies, tax policies, global market conditions and trade barriers all provide economic
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Editor's note: In today's Red, Green and Blue, our political commentators Jimmy Hogan and Shirley Siluk Gregory take a look at the costs and benefits of public transportation.
Jimmy: Public transportation is a blessing to metropolitan areas where well designed mass transit systems help reduce traffic congestion and related pollution. It's also nice to sip a hot cup of coffee and read the paper while leaving the business of driving to someone
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By Ryan Thibodaux •
March 13, 2007
I am a liberal, and I have a confession to make: I don't like it when the government throws my money away, either. It's hard to admit, but it's just another one of those inconvenient truths. It's also exactly what I think is happening with the at least $5 billion in ethanol subsidies the federal government will hand out this year.
Now don't get me wrong: it's not farm subsidies and certainly not alternative [...]
