Greenhouse Gas Reductions under Low Carbon Fuel Standards?

American Economic Journal: Economic Policy - Tập 1 Số 1 - Trang 106-146 - 2009
Stephen P. Holland1, Jonathan E. Hughes2, Christopher R. Knittel3
1Department of Economics, University of North Carolina at Greensboro Bryan School of Business and Economics, PO Box 26165, Greensboro, NC 27402-6165, and National Bureau of Economic Research (NBER).
2Institute of Transportation Studies, University of California, Davis, One Shields Avenue, Davis, CA 95616.
3Department of Economics, University of California, Davis, One Shields Avenue, Davis, CA 95616 and Institute of Transportation Studies, University of California, Davis, University of California Energy Institute, and NBER.

Tóm tắt

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 CO2metric ton). A cost effective policy has much lower average abatement costs ($60–$868). (JEL Q54, Q58)

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American Economic Journal: Economic Policy

Tập 1 Số 1

106-146

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