Unintended Consequences: When Environmental Policy Backfires

The debate over environmental policy is contentious, to say the least. This video may be especially relevant in an election year as we are inundated with a perverse blend of yellow journalism and campaign speech hyperbole. On the Engineering Explained Youtube channel, the host breaks down a 2022 study which strongly suggests corn-based ethanol is worse for overall carbon emissions than just using petroleum.

There are some caveats and additional notes I would add to the discussion.

First, while ethanol is useful for improving the octane rating of gasoline instead of using other chemical additives, it should also be noted that ethanol can have an adverse effect on components of older engines, too. This latter issue was not mentioned. This isn't so much a universally good or bad thing as a point of nuance worth considering.

Second, this topic requires serious analysis of myriad factors. The EPA initially said ethanol was 20% better than gasoline, and would produce a net reduction in emissions. This newer study says the EPA not only oversold the benefits, but ethanol is likely at least 24% worse than gas/petrol. Complicated problems require complicated analysis, and any omitted factor can have a significant effect on overall conclusions. Beware of anyone who insists complex problems can be solved with "simple" or "common-sense" legislative impositions.

Third, central planning always comes with the economic calculation problem where the lack of sufficient relevant information necessarily results in flawed decisions, even assuming perfectly noble intentions by virtuous political actors. The same flaw is also inherent in other less obviously economic matters. In the case of ethanol, economics blends with politics to create perverse incentives. Farmers are promised political plunder through subsidies while changes in demand and production create ripple effects throughout agriculture and other industries. I suggest exploring Public Choice Theory for more analysis of human action as it relates to politics and economics.

Fourth, if exhaust emissions are the primary concern, ethanol is a bad solution even in the best-case EPA estimations. If ethanol is 20% better, but only 10% of pump gas is ethanol, it's really just a 2% increase over ordinary gasoline as noted in the video above. E85 is arguably better according to EPA studies, but not all cars can use it, and that still grants their premise it actually reduces emissions. If ethanol is actually a net carbon problem, E85 is absolutely the wrong answer. Ethanol also a lot less energy by mass when burned as compared to gasoline. It's also a lot easier to make lighter, smaller, more fuel-efficient cars. That could get far more than a 2% efficiency increase. However, US regulations forbid many efficient cars made overseas, curtail potential domestic solutions, and can incentivize US manufacturers to build bigger instead of better.

Fifth, and final for now, this all ignores alternative means of producing ethanol. Corn is probably a terrible option. Hemp advocates have said their favored crop can be a net win far faster, and the video mentions switchgrass as another potential bio-fuel source with no likely wait for benefits to catch up with initial costs and pollution.

What is your experience with political failure and destruction originally implemented as Utopian solutions? Personally, I an definitely in favor of being a good steward of our environment, but I suspect people who focus on "greenhouse gasses" ignore the benefits of industry and the way progress benefits especially the marginalized.