Mona L. Hymel (Arizona) & Roberta F. Mann (Widener) present Moonshine to Motorfuel: Tax Incentives for Fuel Ethanol at Loyola-L.A. today as part of its Tax Policy Colloquium Series.  Ann Carlson (UCLA) & Martin Wachs (Rand Corp) are the commentators.  Here is the Conclusion:

In this article, tax incentives and subsidies for ethanol (and other biofuels) have been evaluated for their economic and environmental effectiveness. Ethanol be part of a solution for reducing dependence on foreign oil and greenhouse gas emissions, particularly in the transport sector. However, the tax incentives for ethanol production should be restructured. For example, corn constitutes about 90% of the feedstock for U.S. ethanol production, although cellulosic sources show increasing promise. Changing the source and methods of agriculture can limit adverse environmental and economic effects of ethanol production. Taxes and other subsidies need to be structured to take these variables into account. As analysts continue to evaluate environmental subsidies and environmental taxes, policy makers must respond by eliminating wasteful subsidies and crafting tax incentives and other subsidies for biofuels that will facilitate the move away from fossil fuels towards renewable energy sources.