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The US biofuel mandate as a substitute for carbon cap-and-trade

Wyatt Thompson, Robert Johansson, Seth Meyer and Jarrett Whistance

Energy Policy, 2018, vol. 113, issue C, 368-375

Abstract: Environmental economists might recommend a cap-and-trade program as a good way to lower emissions of greenhouse gases (GHGs), but US carbon cap-and-trade legislation was proposed and failed to become law. Instead, the biofuel use mandate is the primary existing GHG reduction program in the United States. The mandate effectively requires a rising amount of GHG abatement each year, but allows regulated parties to buy and sell credits to meet annual obligations. Although many aspects of the biofuel mandate look similar to a cap-and-trade program, there are additional requirements, such as feedstock eligibility limitations and waivers. The existence of the mandates is presumably conditional on all the legal requirements, but these conditions represent a departure from a strict GHG cap-and-trade program.

Keywords: Biofuel; Ethanol; U.S. biofuel mandate; RFS; GHG; Cap-and-trade (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:enepol:v:113:y:2018:i:c:p:368-375