Greenhouse Gas Reductions under Low Carbon Fuel Standards? Journal Article uri icon

Overview

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)

publication date

  • January 1, 2009

Full Author List

  • Holland SP; Hughes JE; Knittel CR

Other Profiles

Additional Document Info

start page

  • 106

end page

  • 146

volume

  • 1

issue

  • 1