John Cobb (J.D. 2012, Harvard), Note, Mitigating the Unintended Consequences of Biofuel Tax Credits, 49 Harv. J. on Legis. 451 (2012):

Biofuel tax credits can lead to unintended consequences when coupled
with a biofuel consumption mandate. Models produced by economists have
demonstrated that the economic incidence of biofuel tax credits falls on producers
of petroleum-based gasoline and consumers of fuel in general rather
than on biofuel producers when these credits operate under a binding biofuel
consumption mandate. Ideally, these two policies would not be combined.
However, these economic models do not take into account how regulatory
actors react to the presence of these tax credits, and their economic incidence
depends on the presence or absence of a regulatory reaction. Given currently
existing law, the EPA has the ability to mitigate the unintended consequences,
in certain circumstances, by relying less on its waiver authority to
offset the impact of the tax credits on motor vehicle fuel prices and
consumption.

The example of biofuel tax credits teaches three general lessons about
using tax provisions for regulatory purposes. First, it shows that regulators
must pay attention to questions of tax policy when they impact their field of
regulation. In order to faithfully carry out the mission delegated to them by
Congress, regulators need to have an understanding of how tax provisions
affect the markets they are regulating. Second, it shows that tax policymakers
need to pay attention to what regulators are doing. It is very well understood
that the actions of market actors can shift the economic burden or
benefit of a tax provision onto a different person from the person legally
subject to tax. However, the same can be true for the actions of regulators,
and these actions need to be analyzed as well if the ultimate effect of a tax
provision is to be properly understood. Finally, it calls into question the idea
of using the tax code for regulatory purposes rather than for raising revenue in a fair and efficient manner. Is a policy that requires regulators to understand
public finance and tax policymakers to understand the details of a regulatory
field workable in practice? This kind of complexity only adds to the
costs of coordinating tax and regulatory policy and makes it more likely that
there will be unintended consequences.