How about carbon trading credits for ethanol production?

Tom from TerraPass' TerraBlog suggested over the weekend that all this political and commercial rushing towards ramped-up ethanol production in the United States needs to be looked at in a little more relaxed way. While there are new ethanol plants announced regularly, the plants all differ in how they are powered and what biomass they use to produce the biofuel. Still, in the end, the rules say all ethanol gets a 51 cents per gallon tax credit and meets the renewable fuel standards of the Energy Policy Act. Tom's suggestion is to offer carbon credits to the plants based on how they produce their ethanol, so that cleaner plants (ones that are powered by natural gas, for example) would be rewarded more than dirtier plants that use coal. Also, whoever gets cellulose ethanol up and running in the marketplace will be richly rewarded for their efforts. Sounds good to me.
[Source: TerraPass]