A new report from the Center for Regulatory Solutions lays out in stark detail just how bad the Renewable Fuel Standard (RFS) is for the states of New England — it is expected to cost the economies of these states $20 billion between 2005 and 2024.
The figures alone spell out perfectly why the corn ethanol mandate is a reductive anti-consumer measure. According to the report, the corn ethanol mandate will reduce labor income by $7.3 billion and shrink labor demand by 141,000 job-years from 2005 to 2024. The report then adds that this is the equivalent of 7,050 lost jobs per year, each and every year over a 20-year time period.
The mandate – and its ethanol lobby supporters that pushed it recently in Vermont – led Rep. Peter Welch (D-VT) to denounce it as a “flop” that ruins engines, pushes up feed prices for farmers and raises corn prices for consumers.
“The fact is that corn ethanol is ruining the small engines that power lawnmowers, chainsaws, boats, and snowmobiles across Vermont. The fact is that a federal mandate to blend corn ethanol into gasoline is driving up feed prices for farmers and food prices for consumers. And the fact is that the process of producing ethanol is harmful to the environment.”
But the problems with the mandate are not simply confined to New England. A related report for Ohio shows the RFS cost motorists in the state an additional $4 billion in extra fuel costs from 2005 to 2014, which contributed to $4.8 billion in lost GDP over the same timeframe.
Even in Hawaii, the state mandate was repealed earlier this year after environmental concerns were raised, and consumers complained of lower gas mileages from the blended fuel. In 2013 Florida also repealed its state mandate, with Governor Rick Scott declaring at the time that it was “inconsistent with the efforts to reduce the regulatory burdens that have helped Florida create over 330,000 new private sector jobs in the past two years.”
As a result, just seven states now have state ethanol mandates – and some others, such as Maine, New Hampshire and Texas, have considered banning ethanol-blended fuels altogether.
The message from this litany of reports and state government decisions is clear: the RFS is broken, and government should not be in the business of picking winners and losers. Congress needs to step in and repeal this bankrupt mandate.