Is ethanol good or bad?

Daniel Gross asks the question, then briefly runs down environmental, economic, and humanitarian arguments against expanding ethanol use, before trying to quickly dismiss them:

While I'm as susceptible to Malthusian thoughts as the next paranoid guy, I find much of the anti-ethanol case to be unpersuasive. In each instance, the haters would have us look at ethanol, and the ill effects its greater use would assuredly produce, largely in isolation. Might the production of corn ethanol cause pollution? Of course. Is it worse than the sort of pollution created by other types of energy production—i.e., coal and oil? Probably not. Does greater use of corn for ethanol help spur price increases for food? Sure, but so do many other factors, like, say, the transformation of China from a subsistence farming economy into a more modern one. Is ethanol more inefficient, and hence more costly, than gasoline? Yes. But our heavy use of gasoline imposes all sorts of other costs—from pollution to the hundreds of billions of dollars we spend each year in Iraq. Factor those in, and ethanol no longer seems like such an economic loser.

I don't really agree when he says, "the haters would have us look at ethanol, and the ill effects its greater use would assuredly produce, largely in isolation." Environmentalists don't just dislike ethanol because of the fertilizer and run-off, and they acknowledge that it is less polluting than oil or coal. But the net energy gain from using ethanol is barely positive -- if it is at all -- so we are using coal and oil inputs to produce ethanol energy, which we are then using. So we're still getting the oil and coal pollution, plus we're getting the negative environmental aspects of ethanol. In addition, there are a lot of other forms of alternative energy which could have greater effects on lowering pollution and carbon emissions, but are being crowded out by all the investment in ethanol production and infrastructure.

His point about the cost of ethanol raising food prices, especially for those in the developing world, is even less valid. Yes, China's movement from an agrarian to industrial society is having an effect on world food prices, but that would happen whether we use ethanol or not. Ethanol is adding to the problem, in a very real and significant way. The effects are especially pronounced in Central and South America, where poor peasants in some areas are literally unable to afford corn to make tortillas; they have to resort to wheat, which is an inferior good in those societies.

The point about economic efficiency is also wrong. As I said before, since ethanol production requires large inputs of fossil fuels, the costs of pollution aren't abetted much, if at all. And the notion that we are spending billions in Iraq solely in order to secure oil fields is simply laughable. The fact of the matter is, oil use is largely subsidized by foreign countries, who spend the money to find and extract the oil before it is refined in the U.S. With ethanol, we subsidize our farmers, and have to pay for all the infrastructure ourselves. That it is a net loss on economic terms is inarguable.

Daniel Gross is usually much, much better than this.