Facts are against it. There are plenty of studies, that ethanol is doing more harm to environment than it helps. The reason is, that conventional thinking that "corn growing reduces CO2" is just to simple. You must take into account all factors and also damages that are made by the ethanol production. And it is a fact, that rain forests and other natural plants are displaced by corn farms for ethanol. So conventional thinking "great we have more plants and CO2 is reduced" is just plainly wrong. This thinking was misguiding and misused by the ethanol lobbies.
It would be better to stay on normal gasoline and at the same time reduce the gasoline usage of cars and factories in mid-term. In long term, we should go for better energy sources (preferably solar and wind energy).
So, the environment is no valid reason for the ethanol promotion. What is the only (valid) reason to do so?: To get less dependent from the oil-countries. (so politics again)
But the best way would be to get rid of this environment-costly energy source for real environment-friendly ones.