Environmental outcomes of the US Renewable Fuel Standard

Tyler J Lark, Nathan P Hendricks, Aaron Smith, Nicholas Pates, Seth A Spawn-Lee, Matthew Bougie, Eric G Booth, Christopher J Kucharik and Holly K Gibbs

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: The Renewable Fuel Standard (RFS) specifies the use of biofuels in the United States and thereby guides nearly half of all global biofuel production, yet outcomes of this keystone climate and environmental regulation remain unclear. Here we combine econometric analyses, land use observations, and biophysical models to estimate the realized effects of the RFS in aggregate and down to the scale of individual agricultural fields across the United States. We find that the RFS increased corn prices by 30% and the prices of other crops by 20%, which, in turn, expanded US corn cultivation by 2.8 Mha (8.7%) and total cropland by 2.1 Mha (2.4%) in the years following policy enactment (2008 to 2016). These changes increased annual nationwide fertilizer use by 3 to 8%, increased water quality degradants by 3 to 5%, and caused enough domestic land use change emissions such that the carbon intensity of corn ethanol produced under the RFS is no less than gasoline and likely at least 24% higher. These tradeoffs must be weighed alongside the benefits of biofuels as decision-makers consider the future of renewable energy policies and the potential for fuels like corn ethanol to meet climate mitigation goals.

Keywords: 38 Economics (for-2020); 31 Biological Sciences (for-2020); 3106 Industrial Biotechnology (for-2020); 13 Climate Action (sdg); 15 Life on Land (sdg); 7 Affordable and Clean Energy (sdg); 31 Biological Sciences (for-2020); 3103 Ecology (for-2020); Alcoholism; Alcohol Use and Health (rcdc); Substance Misuse (rcdc); 15 Life on Land (sdg); Ethanol (mesh); Motor Activity (mesh); Seafood (mesh); biofuels; land use change; greenhouse gas emissions; water quality; environmental policy; Ethanol (mesh); Motor Activity (mesh); Seafood (mesh); Ethanol (mesh); Motor Activity (mesh); Seafood (mesh) (search for similar items in EconPapers)
Date: 2022-03-01
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