Much of America's energy debate can be summed up as "drill, baby, drill" versus "farm, baby, farm." Fans of conventional energy are pressing for the development of America's native oil and gas resources, while advocates of renewable energy call for greater amounts of biomass, either as conventional ethanol or next-generation cellulosic ethanol. Ethanol advocates point to Brazil and credit its switch to sugar-cane ethanol with helping to insulate the country from oil shocks of recent years. But digging a bit deeper into the data tells a more interesting tale: while ethanol certainly helped Brazil economically and environmentally, oil production was responsible for three-quarters of the energy wealth created by Brazil's energy development over the last twenty-eight years. How would the United States fare with comparable policies?

Researchers Roger Aliaga-Diaz, Joseph H. Davis, and Marc D. Weidenmier will present their recent National Bureau of Economic Research working paper, "Is Sugar Sweeter at the Pump? The Macroeconomic Impact of Brazil's Alternative Energy Program." AEI's Kenneth P. Green will moderate.