The Expiration of the Ethanol Tax Credit: An Analysis of Costs and Benefits Open Access
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The Volumetric Ethanol Excise Tax Credit expired on December 31, 2011. This cost benefit analysis concludes that without the tax credit, the net benefits will be $168.1 billion in net present value from 2012 to 2022. The total costs will be $116.8 billion, primarily imposed upon ethanol producers and farmers. The benefits, realized through improved environmental conditions and stabilized food prices, will save society a total of $284.9 billion. Alternative considerations beyond the scope of this assessment are presented, such as the role of innovation and foreign alternative fuel imports. These considerations will play a significant role in future outcomes from the expiration of the tax credit.