Editor's note: Red, Green and Blue is Green Options' weekly take on politics and the environment from both sides of the aisle. Jimmy Hogan represents the conservative position. Ryan Thibodaux's progressive take on this issue is here.

I’ve run the numbers and done the math. Because of our progressive tax structure I could easily quit my job and do just as well financially as I do now. My wife and I are a pretty typical two income professional household. Given income tax, social security taxes, sales taxes, etc. about one half of the second income ends up going to taxes in one form or another. It would be easy to fire the housekeeper, clip coupons, mow my own grass, change my own oil, dine out less and basically play defense with the family budget to the point where our lifestyle would actually be improved over the way we live now.

So what is it that drives me and everyone else like me to continue on this gerbil wheel of production and consumption? I’m not sure; but whatever it is, it is good for society. As of the 2004 data available here (table 6) over 68% of the federal income taxes are paid by the top 10% of earners in this country; and the top 50% of earners pay 96.7% of the total federal income tax bill. These taxes go to fund many programs including education, health and welfare and, certainly not least important, our federal government’s contribution toward environmental research and conservation. Given also that charity and private contribution to environmental causes must come primarily from those who actually have money, the higher income groups also fund private efforts disproportionately. The spending of this group also keeps all number of service jobs going that would not exist otherwise.

So back to the question. What is it that drives us to produce such that we may continue to residually benefit our own society and the world in such a large way? Top earners don’t have to work. Most could get by on much less than they earn now. It is a fact that our society is funded by people who choose to work, not by people who have to work. I believe that two basic freedoms contribute to this. The opportunity to earn a living doing what we want to do and the opportunity to spend surplus earnings in the way we see fit. Without these two factors our huge economic engine, upon which all public and charitable efforts depend, collapses.

Since I can only control my own desires and excesses, who am I to judge the excesses of others? If ownership of a big, honking, gas guzzling SUV motivates someone to get up and go to work every day then I’m not going to judge. I might question his intelligence given current gas prices, but that’s up to him. If I limit that which motivates him to produce, am I not harming the overall economic cycle? There’s nothing evil or wrong with overt wealth. As distasteful as it may be to some, the fact that Rush Limbaugh had about a million dollars to spend on a bionic ear actually blazed the trail for others and made the technology more affordable for less fortunate people with hearing loss.

If we index the cost of jet fuel and electricity to their real environmental and geopolitical costs then I say good for him that he can afford it. I’ve got a good friend who is a very strong environmental advocate but if I green-rate his BMW Z3 against my miserly 4 cylinder Honda Accord I’m sure I would win the contest hands-down. Does that make him a hypocrite? I don’t think so. I admire his environmental advocacy and enthusiasm (… plus, I must say that Z3 is a pretty sweet ride). The point is that it is fine to be an advocate for conservation, but we must also understand that, in the ultimate definition of unintended consequence. the opportunity for overt consumption is a motivating factor that keeps people working who might not otherwise work. This motivating factor serves our economy and everything that depends upon our economy including the environment.

Myth 1: Ethanol costs substantially more than gasoline.
There are many studies that have placed the whole cost of ethanol including cost to plant, fertilize, harvest and refine crops; higher than gasoline. There is some truth to the studies but what they fail to consider is the WHOLE cost of gasoline.

Currently oil energy imports represent 40% of our trade deficit. Worse, we are spending this money both directly and indirectly in a way that supports regimes that are hostile America. At the same time we are subsidizing our farmers to keep U.S. agriculture viable; often paying farmers not to grow various crops. Now I don’t know what the added geopolitical cost per gallon of gasoline is but I do know that if we consider these facts it substantially narrows the gap between the cost of ethanol and the cost of gasoline.

Add to this the obvious benefits of CO2 mitigation with renewable energy resources and I think we have a pretty even comparison between gasoline and ethanol.

I personally would rather our farmers profit from our energy demands rather than continue to contribute to a market that underwrites the Mad Mullahs in Iran or U.S. hating communists like Hugo Chavez. Shifting the world energy market to ethanol can solve these problems and make the U.S. a net energy exporter; and this is a good thing.

Myth 2: Every acre in the U.S. will need to be planted in corn to meet our energy needs at the expense of food crops.

Given the data at the time of many of these studies this is somewhat true but technological bioengineering breakthroughs in crop yields have helped and continue to help this problem. The most promising technology, though, is in cellulosic ethanol technology where enzymes are used to break down hard fibers from agricultural wastes and very hearty native grasses into fermentable sugars. This technology is proven and available and only suffers a capital infrastructure disadvantage to gasoline and conventional ethanol. Once this is overcome spinning gold from straw will become as common as an every week fill-up at the local service station.

Myth 3: Ethanol has a substantially lower energy yield than gasoline.

This is a myth I really hear often so it deserves a good bit of attention. It is true that the potential energy yield of a gallon of gasoline is higher than a gallon of ethanol. Most of the figures I’ve seen give gasoline about a 20% advantage. The problem with this statistic, however, is that the conventional internal combustion engine is unable to consume all of the energy that is available in a gallon of gasoline. Even in the most efficient engines we have today pump gasoline begins a process of pre-ignition or detonation when compression ratios get much higher than 9 to 1. This detonation occurs when the air and fuel mixture explodes prematurely in the combustion chamber and this limits the amount of energy we can derive from a gallon of gas. Under the same compression ratio ethanol has a lower energy yield than gasoline but at higher compressions (around 13:1) ethanol has a comparable energy yield without the problem of detonation. Our current generation of flex-fuel vehicles that burn both gasoline and ethanol are limited to the least common denominator of the lower compression. Once E85 ethanol blends are readily available across the country, however, cars manufactured specifically for this blend will get comparable mileage/performance.

Myth 4: Transportation infrastructure inadequate.

Again, in order to compare apples to apples we must consider the capital infrastructure advantage that gasoline has over ethanol. It is true that the corrosive nature of ethanol prevents it from being transported in the existing pipe-line network. Is it a fair to use gasoline’s existing playing field as a benchmark against one that has yet to be built for ethanol? If the other advantages merit a shift to ethanol as our primary transportation fuel source then shouldn’t the one-time capital infrastructure costs of transportation be negated in comparison to gasoline?

In any case it does not make sense to think of ethanol with the same centralized distribution network. Ethanol lends itself to a smaller distributed network where small immediately adjacent rural areas feed the urban areas next door. This has the further advantage of economic development and self sustainability of communities that many times rely on the welfare resources of urban economies. Ethanol can allow us to target depressed rural areas where unemployment is high with useful industry rather than health and human services handouts.

In summary…
Although I disagree with production mandates and certain tariffs that tend to cause vast price fluctuation and inflation of ethanol costs, I do believe that we should index the cost of gasoline to its real geopolitical and environmental costs. If we’re going to fight a war every decade or so to protect world oil interests, this cost should show up in the price at the pump. When it does, ethanol will quickly become a very appealing alternative. I also think it is important to protect our fledgling ethanol industry and certainly invest in cellulosic research but eliminating the sugar tariffs and encouraging open trade across the Americas in sugar is also a step in the right direction at least in the short term.