Most ethanol is currently made from corn. Scientists in Europe are worried that increasing production for ethanol will increase the demand for the crop, thus leading cut down forests to plant more corn. This would have a greater negative impact on the global climate than any positive impact from using ethanol instead of gasoline.
Meanwhile, researchers at the University of Minnesota and some place called "Princeton" have learned that converting forests and prairies into farmlands to grow corn actually releases carbon into the atmosphere, far more than is saved by replacing gas with ethanol.
OTOH, this author claims there is no evidence that forests and prairies are being converted to farm land. Rather, the demand for corn is being met by more efficient farming. He also argues that ethanol is cost-efficient and does not lead to higher food prices.