EPA greenhouse gas accounting is flawed and inaccurate, Cornell experts say

Feb 19, 2010
by WLJ

A recent Environmental Protection Agency (EPA) announcement that corn-based ethanol achieves a 21 percent greenhouse gas reduction compared to gasoline is based on false accounting assumptions and could actually lead to more fossil fuel consumption, according to Cornell University economists whose research will be released in March in the journal Applied Economics Perspectives and Policy.

Harry de Gorter and David R. Just, professors of Applied Economics and Management at Cornell, note that the EPA’s calculations assume, for example, that every gallon of ethanol produced will result in a gallon of gasoline that will not be burned.

“It’s just a flawed concept.

It makes no sense,” Just said. “Most of that ‘saved’ gasoline will likely be burned somewhere else with potentially dirtier technology, such as China.”

The EPA’s ethanol announcement was part of the Feb. 3 EPA Renewable Fuel Standard Program which will be used to qualify ethanol for government subsidies and minimum fuelblend requirements that could potentially be worth billions of dollars.

The pair also criticizes the subsidy and mandate program. “By having both an ethanol subsidy and a mandate for its consumption, the government will increase global fuel supply, and the subsidy will actually subsidize oil consumption,” de Gorter explained. “A more effective policy would have a mandate alone and get rid of taxpayer funded subsidies.”

Just and de Gorter will have their findings published in the inaugural March issue of the peerreviewed journal Applied Economics Perspectives and Policy, Vol. 32, Issue 1, Oxford University Press. The full text of this article, “The Social Costs and Benefits of Biofuels: The Intersection of Environmental, Energy, and Agricultural Policy” is available at www.aepp.oxfordjournals.org. —WLJ