Wednesday, August 27, 2008

Ethanol Resistance in GOP platform

Stephen Spruiell reports at NRO's Corner blog that there is strong, new opposition to ethanol fuel mandates coming from the Platform committee. Food up, mileage down = bad.

I think this will resonate with the majority of voters who are paying attention, but we may suffer in marginal farm states. This is a politically risky thing to do, but it is also the right thing to do.

As a policy matter, I think we may end up merely freezing the mandates or cutting them back slightly . Removing them entirely will send a shock to the farm economy, but allowing them to grow as planned is unsustainable. As much as I'm a free-marketer, another part of being conservative is not making sudden swings in policy and to avoid introducing exogenous shocks to the economy. To suddenly kill the ethanol mandate will have unplanned repercussions. Some combination of freeze, reduction, or phasing-out would be preferable. A compromise might also include a mandate for flex-fuel capable vehicles, which would create a potential market for biofuels if/when they become economical, and therefore an incentive to develop the technologies that might allow biofuels to become viable.

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