Tuesday, March 20, 2007

Talking but not acting

It seems President Bush is not really serious about getting alternative energy to the American people. Is anyone surprised? I suspected President Bush's sole nod to alternative energy, increasing the use of ethanol, was more of a politically motivated cookie to the Midwest than it was a serious attempt to ween America off oil. I naively thought something substantive might happen with Bush traveling in Brazil and meeting with Lula. However, they simply announced an agreement to to promote international production of ethanol. Whatever that means. Will the U.S. will end its 54-cent per gallon tariff on imported ethanol? "It's not going to happen," said Bush.

We are not serious about adopting alternative energy sources to replace oil as long as we still have such a tariff policy. We should subsidize (not tax) alternative energy sources if we are serious about adopting alternative energy sources. There is a loophole in the tariff, however, and Caribbean nations are starting to take advantage of it. Econbrowser reports that the tariff does not affect ethanol from the Caribbean that has been "substantially transformed." It seems that the caribbean nations do not have the means to actually produce the ethanol from sugar cane, but they can import ethanol from Brazil. They particiapte in a dehydrating process that counts as "substantial," and then import it to the U.S. and avoid the tariff.

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