Glenn Reynolds is enthusiastic about Robert Zubrin's proposed mandate to build flex-fuel cars. Glenn and Helen interview Zubrin here.
I am sympathetic to a lot of what Zubrin has to say, including about the need to undermine OPEC. But I disagree with his mandate, as explained in an earlier post. The trouble with it is, if a flex-fuel transition really would be cheap and easy, there's no need for a mandate; the market, combined with a public awareness campaign, could do the trick. And if it really does require a mandate, then it will defeat its own purpose, by making new cars pricier, keeping older ones on the road longer, and forcing R&D decisions to be based on politics rather than merit.
And even if the mandate were in place, alcohol fuels would only be competitive if gas prices remain high. OPEC, being a cartel, has enormous ability to lower oil prices while still making profits, and would not hesitate to do so if its own survival were at stake.
A carbon tax, by contrast, would give incentives for people to use as little gasoline as possible, and would allow the full range of alternative-energy and energy-efficiency options to compete.