Monday, July 13, 2009

Unintended Consequences

From the WSJ:

This story begins with Congress's 2005 highway bill. It included a subsidy to encourage businesses to power their motor vehicles with "alternative fuels" such as ethanol, rather than fossil fuels such as diesel. Congress said businesses could receive a 50-cent tax credit for every gallon of gasoline if they used a blend of a traditional fossil fuel and an alternative fuel.
Then in 2007, Congress extended this largesse beyond highway vehicles to a wider range of alternative fuel users. Enter "black liquor," a carbon-rich substance the paper industry has used for decades to power its mills. It also qualifies as an alternative fuel. All the paper industry had to do was blend some fossil fuel in with their alternative fuel and -- voila! -- billions of dollars in federal subsidies were within reach. So they did.

Once again we have a clear example of the law of unintended consequences; Politicians attempting to “do something” about climate change end up creating a conflict of interest and a mess.


Harrison said...

Yes I wrote about this too. Government is such a joke. Here's the story I read about it from:

Burro said...

I propose that we cap the amount of paper that companies can use. Every company will be given an allowance of how many square inches of paper they can use. If they end up not reaching their quota, they can sell their allowances to other companies that use a lot of paper.

This would be great for the print media industries, because they would be forced to modernize their business model. I am also sure that this would create a lot of jobs.