Possibly. By ending subsidies and taxing carbon, we’d allow the truly cost-effective alternative fuels to survive. It may not be ethanol. We should also lift tariffs on the importation of ethanol. Specifically, Brazilian sugar-based ethanol.

“I’m rather cool toward the idea of a carbon tax (even a revenue neutral one), for the reasons given here.”

His arguments in order:
1. Of course it’s politically infeasible. That’s no reason to oppose it though.
2. Inability to internalize all externalities should not mean that we shouldn’t internalize any.
3. His third argument is to wait until things get worse?! Why wait until just 2050 as he says we should. Why not wait until 2100 while we’re at it?
4. We already tax fossil fuels so the added compliance costs would be minimal. Also, we can offset it, not with a tax reduce elsewhere but eliminate a tax altogether or eliminate a government program. But so what if there’s deadweight loss? That argument can only be used if a more efficient alternative can be offered that achieves the same goals. If the mere existence of “deadweight loss” is a deal killer, we’d have no government.

Not to be snarky, but that doesn’t 100% follow. I mean anyone who eats corn-fed beef knows that sometimes you use it in a fashion that doesn’t put the corn directly on the table but the calories of it are used for the creation of protein or in this case fuel. Not really an either/or proposition. That being said, the ethanol scam is not something I really am prepared to defend – it is neither as helpful nor as efficient as promised… so we are left holding the bag on this one…

Again!

I’m also skeptical about raising CAFE standards, which, like the ethanol subsidy, haven’t exactly lived up to their hype.

I know, I know. I’m just no fun at all.

Just to be contrarian… do you think that would have any positive effect on the problems of food costs that were mentioned by the OP?

Great point. Having the government impose a disincentive for oil would be more effective. Revenue-neutral carbon tax!