Greenhouse Gas Reductions under Low Carbon Fuel Standards?
Stephen P. Holland, Jonathan E. Hughes and Christopher R. Knittel
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| Article Citation |
Holland, Stephen P., Jonathan E. Hughes, and Christopher R. Knittel. 2009. "Greenhouse Gas Reductions under Low Carbon Fuel Standards?" American Economic Journal: Economic Policy, 1(1): 106–46.
DOI:10.1257/pol.1.1.106
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| Abstract |
A low carbon fuel standard (LCFS) seeks to reduce greenhouse gas
emissions by limiting the carbon intensity of fuels. We show this
decreases high carbon fuel production but increases low carbon fuel
production, possibly increasing net carbon emissions. The LCFS
cannot be efficient, and the best LCFS may be nonbinding. We simulate
a national LCFS on gasoline and ethanol. For a broad parameter
range, emissions decrease, energy prices increase, abatement
costs are large ($80 - $760 billion annually), and average abatement
costs are large ($307 - $2,272 per CO2 metric ton). A cost effective
policy has much lower average abatement costs ($60 - $868). (JEL
Q54, Q58)
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| Authors |
Holland, Stephen P. (U NC, Greensboro)
Hughes, Jonathan E. (Institute of Transportation Studies, U CA, Davis)
Knittel, Christopher R. (U CA, Davis)
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| JEL Classifications |
Q54: Climate; Natural Disasters; Global Warming
Q58: Environmental Economics: Government Policy
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(pp. 106 - 46)