How Pandering To Iowa’s Ethanol Lobby Hurts America

How Pandering To Iowa’s Ethanol Lobby Hurts America

While a small group of corn farmers may benefit from the Renewable Fuel Standard, higher gas prices and less fuel-efficient gasoline hurt everyone.

Ten years ago this month, President George W. Bush signed the Renewable Fuel Standard into law, implementing regulations that require companies to blend specific amounts of renewable fuels into gasoline. No state benefits more from the RFS than Iowa, and with the Iowa caucuses six months away, presidential candidates are already pandering, flip flopping, or avoiding the issue altogether as they attempt to woo voters.

While Iowa farmers who grow corn specifically for biofuels have greatly benefited from the RFS, ethanol and other biofuels are overwhelmingly hurting the planet and people’s pocketbooks. This crop of presidential candidates needs to keep that in mind as they continue to canvass the Hawkeye State.

It’s easy to see why politicians pander to Iowans. The last two Republicans to win the Iowa caucus, Mike Huckabee and Rick Santorum, both supported the RFS. Candidates that have opposed the RFS—like Marco Rubio, Bobby Jindal, and Rand Paul—have avoided the issue in Iowa, skipping well-attended events like the Iowa Ag Summit.

They, along with other RFS opponents like Jeb Bush and Ted Cruz, are unsurprisingly outside the top three, according to the most recent polling in the state. The top three in Iowa include RFS supporters Ben Carson and Carly Fiorina. As is the case with many policy issues, it’s still unclear where polling leader Donald Trump stands on the RFS.

Iowa Squeezes Everyone Else Dry

But candidates should not focus solely on the benefits this corporate welfare program has had on Iowa farmers, because it has had devastating effects for many outside of the state.

Perhaps more importantly, RFS has not reduced carbon emissions—one of the primary objectives of the policy.

The “corn boom” RFS created has impacted over 5 million acres of land once set aside for conservation. Landowners have filled in wetlands and have sprayed billions of pounds of fertilizer to facilitate the demand for corn to fulfill gas ethanol requirements. As a result, rivers have been contaminated and the habitat of waterfowl and other wildlife has been damaged.

Perhaps more importantly, RFS has not reduced carbon emissions—one of the primary objectives of the policy. Scientists at the University of Wisconsin found that the corn boom has released as much carbon dioxide as 34 coal power plants in one year. It turns out ethanol is not carbon-neutral, as promised, and it actually worsens gas mileage, making cars less fuel-efficient and worse for the environment.

Aside from the environmental impact, less fuel-efficient vehicles means spending more on gasoline. Ethanol delivers 25 percent fewer miles per gallon than gasoline, and ethanol-induced higher gas prices increase the impact of the RFS. Last year, the Congressional Budget Office reported that if the RFS is not repealed, gas prices could increase 13 to 26 cents per gallon by 2017. While a small group of corn farmers may benefit from the RFS, everyone is impacted by higher gas prices and less fuel-efficient gasoline.

Big Agribusiness Smashing Moms and Pops

The RFS also hurts American families’ budgets by damaging their cars and other gasoline-operated equipment. The Environmental Protection Agency is well aware of this fact, and has acknowledged that ethanol in gasoline can damage internal combustion engines by increasing exhaust temperatures and indirectly causing component failures. Higher percentage ethanol-blended fuels may increase the damage to American’s cars if the RFS remains in place.

While the RFS may be a boon to Iowa corn farmers, it’s essentially a tax on the poor, who are suffering from higher prices because of it.

It’s not just prices at the gas pump and costs at the repair shop increasing because of RFS—it’s prices at the grocery store, too. Anything corn goes into is more expensive because of the RFS. Purdue University researchers found that repealing the RFS would cause food prices to fall 13 percent overall. In 2012, the average U.S. family of four faced a $2,000 increase in food costs due to the higher corn prices RFS has caused. The increase in costs for both food and fuel are especially harmful to lower- and fixed-income families that spend a larger percentage of their wages on food and fuel.

While the RFS may be a boon to Iowa corn farmers, it’s essentially a tax on the poor, who are suffering from higher prices because of it. Plus, it’s a net negative for the environment. It’s time for presidential candidates, particularly Republicans, to stop pandering to voters in Iowa and promise to repeal the harmful Renewable Fuel Standard.

Erik Telford is senior vice president of the Franklin Center for Government and Public Integrity.
Photo by Benjamin Chan
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