As COVID-19 reshapes our economy, our newsletter will help you unpack the news from the day.
Ted Cruz’s victory in the Iowa Republican caucus was far from certain, but not just because of strong competition from rival Donald Trump. Iowa’s corn industry has benefited a lot from a decade-old law requiring that renewable fuels, largely corn ethanol, be blended with gasoline. And Cruz is no fan.
His opposition to the Renewable Fuel Standard drew a lot of fire in the state. But he’s not its only detractor.
“The Renewable Fuel Standard is essentially an income redistribution system,” Vince Smith, economics professor at Montana State University, said.
Though corn prices are low today, ethanol pushed up demand for corn, boosting prices and making livestock feed more expensive. Smith said as a result of the Renewable Fuel Standard, American consumers have paid more for food, while a limited number of farmers benefit.
Others decry ethanol’s environmental effects, arguing corn ethanol production involves significant greenhouse gas emissions.
“It’s actually worse for the climate than gasoline,” Emily Cassidy said, research analyst with the Environmental Working Group. “And it also increases the amount of pollutants that get into water by increasing fertilizer use.”
Despite a push from parties ranging from environmentalists to big oil companies, the Environmental Protection Agency recently declined to lower the biofuels requirements.
Ethanol proponents maintain that it is helping America reduce its dependence on foreign oil sources. What’s more, a lot of infrastructure has built up around ethanol, which some don’t want to see go to waste.
“We’ve put a lot of effort into this industry already,” said Bruce Schmoll, a corn producer near Claremont, Minn. “And to just let it dry up on the grapevine, so to speak, I think that’s a poor way to go.”
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.