Brazil is considered one of the world leader in ethanol, the country with the most successful alternative fuel program, one of the cheaper (if not cheapest) ethanol technologies and, by using sugar cane, one of the most energy efficient. All cars here can easily handle up to E40, and most cars can handle any mix of gas and ethanol. Oh, and the flex fuel technology for any kind of mix? Mostly developed here also.
I'm not one of those gaia worshipping eco-nuts but I've long thought that we should be producing more flex vehicles that will run on just about anything from e-0 to e-100, then we should let market economics deal with pricing. Making alcohol out of corn is stupid. Sugar cane, as you mention is one of the more efficient ways to do it. From what I understand saltgrass is pretty good for it too. The basic problem is, none of this is really based on economics. It's all politics and power, with a rather unhealthy dose of religious zealotry thrown in the mix.
I would love if if I had a choice of what kind of fuel to power my vehicles with. If instability in muslim lands cause the price of gas to skyrocket, which seems to happen occasionally because death and destruction seems to be built into their religion, then we'd be able to switch to other alternatives. You'd take a hit on mileage, because as has been discussed here up thread, there is nothing you can do about the energy density of alcohol vs. petrol. However, you'd know that up front and be able to make intellegent decisions about it. As it is, with government mandating this and that, and making sure their political buddies are paid off in the front-loaded primary states, we're living with the worst of both worlds, we're still hostage to those muslim nut-jobs, and at the same time are subsidizing inefficient methods of alcohol production.
I don't give a crap about carbon. what I care about is that you need energy to run an industrialized society. We should be going about it intellegently, rather than the haphazard ways we are.