Oscarthecat, many environmentalists do not support ethanol for reasons similar to those you described. Most now favor natural gas, which is a much better transition fuel because it burns cleaner and is relatively easy to extract and process.
That’s fine- but it doesn’t change the fact that the government’s support of that particular innovation allowed it to advance in ways would have not been possible if the free market had simply been allowed to operate.
Think about how far along other technologies might have come by now if the artificial promotion of ethanol hadn’t effectively stifled and slowed other, better, alternatives by drawing researchers away with the promise of government funding courtesy of washington lobbyists and politicians beholden to their special interest handlers.
Market forces make no pretense about goals and intentions- researchers, developers, suppliers, entrepreneurs…they’re all there to make a living, and they do that by creating a product consumers want. If consumers want a safe, clean, energy source and are willing to pay for it, then the market will find a way to provide it.
In the free market, when producers abuse that trust by peddling snake oil, then consumers will figure it out in time, and move on to the next producer until they find someone who can provide what they want the way they want it.
But when the government is involved, however, the majority of research goes in the direction that the people in government want it to go- which isn’t necessarily in the best interests of the people they’re supposed to represent. And when that line of research turns out to be faulty, it isn’t simply a matter of consumers moving on to the next producer- they have to wait for the government to approve another big influx of funding.
