I've said before that ethanol doesn't reduce emissions, but here are some specifics that show that I was right - and wrong. Emissions models at Stanford University are showing that E85 will in some respects be worse than regular petroleum, accordingto Mark Jacobson.
Along with many of the same pollutants as gasoline, a large amount of unburned ethanol gas escapes into the atmosphere. That vapour readily breaks down in sunlight to form acetaldehyde, which can send ozone levels soaring. While ethanol-burning cars will emit fewer carcinogens such as benzene and butadiene, they will spew out 20 times as much acetaldehyde as those using conventional fuel, Jacobsen found.
With growing concerns related to food security, the only remaining benefit of ethanol seems to be reduced reliance on fossil fuels.