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Subsidies to Ethanol in the United States

This chapter reviews the major policy developments affecting the fuel-ethanol industry of the United States since the late 1970s, quantifies their value to the industry, and evaluates the efficacy of ethanol subsidization in achieving greenhouse gas reduction goals.  Total support to ethanol is currently substantial ($5.8-7.0 billion in 2006) and set to rise sharply even under existing policy settings.  However, its cost effectiveness is low, especially as a means to reduce greenhouse gas emissions.

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