True, ethanol is not the purest thing to burn in the universe, but while it does have a component or two that "may" be an issue, like various aldehydes, any evidence that this is a serious concern is spurious at best. No one can fully agree if it should be considered a carcinogen or a threat to health in the concentrations of vehicle exhaust emissions.
But, it has also been shown that emission particulates, that have a serious detrimental effect on those with asthma, are greatly reduced and E85 shows a reduction of almost 50% in the CHG that are considered responsible to any climate change, if you live in that mindset camp. And it has been shown that since ethanol burns cooler and slower, there is a more complete burn in the cylinders as opposed to petroleum products.
No matter what we burn in the engine, except maybe burning hydrogen, there are going to be some emissions that are not desirable.
And what of the new Extreme Boosted Direct Injection (EBDI) engines that are being tested now that use E85? A 3.2L EBDI engine on E85 gets the same or more hp and torque as a 6.6L Duramax diesel, while getting better fuel economy and is cheaper to build. No other emission stuff needed than what is being used on gas engines now. Just cats. Several of these are in testing right now in Chevy Silverado 3500HD pickups. Oh, that they are not restricted to E85 but can adjust to lower ethanol blends, you just lose some of the performance. So what would be cleaner? A 3.2L E85 engine or a diesel fired 6.6L Duramax? That really should be a no brainer answer.
And it gets better mpg than diesel! Try that with you gas only engine! it is out there for you to see for yourself. Just do a search on EBDI engines. Ricardo is the main design group that is working on this with GM.