Marcel de Armas

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Publication Date

Spring 2007


The United States is recognizing the value and importance of energy diversification, but it may also be creating greater environmental harm in the process. If America decreases its dependence on foreign oil it will create greater economic security for itself, reduce its current account deficit, provide less financing for tyrannical leaders and terrorists with American petrodollars, and improve its environmental credentials. To reduce America’s craving for oil, the government encourages domestic ethanol production; the United States is behind only Brazil, the world’s largest producer of ethanol, and combined the two produce over 70 percent of the world’s ethanol. Currently the U.S. domestic ethanol industry is grow- ing as a result of alternative fuels becoming politically popular, and the addition of a subsidy and tariff applied to ethanol. However, arguably the ethanol tariff and subsidy do not provide any substantial environmental benefits for the United States or the world.