Many people don’t understand my opposition to government subsidies for “green” energy and question my belief that the market process is likely to generate environmentally and ethically superior results. Since both government mandates and markets will produce errors, it’s reasonable to ask: Which is more likely to correct them quickly?

Government should provide funds for basic R&D. But beyond that we must be alert to two problems. First: History usually shows that the consequences of ambitious government actions often counter alleged goals. Think of the unintended fallout of rent control, minimum wage legislation, and welfare entitlements.

Second: We’ve learned government too often devolves into an engine of plunder when it subsidizes programs. Transferring wealth and opportunities from the weak and unorganized to the well-off and well-organized becomes the dominant activity. Farm subsidies, for example, overwhelmingly go to the wealthy and well-connected.

This hard-edged analysis leaves many people unsatisfied and even angry. My colleagues and I are often accused (by people who should know better) of being cynical, uncaring, “market fundamentalists.” But ad hominem attacks usually signal weak arguments.

Economist Thomas Sowell observes that crafting effective public policy requires more than good intentions. The relevant question is whether the proposed cure produces consequences worse than the original problem. Here are some environmental consequences of government mandating the production of 7.5 billion gallons of ethanol by 2012.

The Christian Science Monitor reports that the high price of natural gas has prompted Midwest refineries to use coal to turn corn into ethanol. One plant burns 300 tons a day. Recall ethanol is touted as a “clean, renewable fuel ... that will reduce ... greenhouse gas emissions.”

David Hawkins of the Natural Resources Defense Council understands the implications: “If the biofuels industry is going to depend on coal, and these ... plants release their CO2 to the air, it could undo the global warming benefits of using ethanol.”

Meeting ethanol mandates requires increasing the acreage planted in corn. Corn is of one of the most energy-intensive, polluting monocultures in all of agriculture. It requires huge amounts of water, petroleum-based fertilizers, and diesel fuel for tractors. Further, fertilizer-rich runoff flows into the Mississippi River and contributes to the “dead zone” (about the size of New Jersey) in the Gulf of Mexico.

Government funding for ethanol is really about subsidizing corn growers. And where does the vast majority of the money go? To Archer Daniels Midland (“the Exxon of corn”). ADM produces 60 percent of the nation’s ethanol and annually receives about $400 million to do it. ADM’s motto, “Resourceful by Nature,” seems appropriate.

Ethanol producers get plenty of government help, for example a 54-cent-per-gallon tariff on imported ethanol. Energy Secretary Sam Bodman defends this, claiming it prevents foreign producers (i.e., Brazil) from “hav[ing] an advantage over American companies.” The GOP purports to favor markets, but hypocritically supports mandated flows of commodities. They act like the commissars of a socialized factory producing ethanol instead of widgets. Perhaps setbacks in the November elections will remind them of their principles.

Haven’t the environmental costs of central planning in the former Soviet Union disabused folks of the notion that only markets produce environmental damage? “That’s an exception,” many respond. O.K., what about the environmental costs to the ecosystems of the American West from federal programs that produced the world’s largest system of dams and reservoirs, and a network of forest roads that is eight times the mileage of the U.S. interstate highway system?

Markets are a decentralized process of discovery. This process is much more likely to yield solutions that function under many different circumstances. Here’s how it works. High energy prices transmit important information. They spur millions of individuals into action, harnessing their unique knowledge and talents. Through trial and error, experimentation and feedback, creative ideas emerge. The best survive a process of ruthless and unsentimental testing.

Perhaps there is good reason for the government to intervene in our energy future. But the relevant question to ask is, how does that reason look in reality and how does it work in practice?