Does a Renewable Fuel Standard for Biofuels Reduce Climate Costs?

Mads Greaker, Michael Hoel () and Knut Einar Rosendahl

Journal of the Association of Environmental and Resource Economists, 2014, vol. 1, issue 3, 337 - 363

Abstract: Recent literature on biofuels has questioned whether biofuels policies are likely to reduce the negative effects of climate change. Our analysis explicitly takes into account that oil is a nonrenewable natural resource. A blending mandate has no effect on total cumulative oil extraction. However, extraction of oil is postponed as a consequence of the renewable fuel standard. Thus, if emissions from biofuels are negligible, the standard will have beneficial climate effects. The standard also reduces total fuel (i.e., oil plus biofuels) consumption initially. Hence, even if emissions from biofuels are nonnegligible, a renewable fuel standard may still reduce climate costs. In fact our simulations show that even for biofuels that are almost as emissions intensive as oil, a renewable fuel standard has beneficial climate effects.

Date: 2014
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Related works:
Working Paper: Does a Renewable Fuel Standard for Biofuels Reduce Climate Costs? (2014)
Working Paper: Does a Renewable Fuel Standard for Biofuels Reduce Climate Costs? (2014)
Working Paper: Does a Renewable Fuel Standard for Biofuels Reduce Climate Costs? (2014)
Working Paper: Does a Renewable Fuel Standard for Biofuels Reduce Climate Costs? (2012)
Working Paper: Does a renewable fuel standard for biofuels reduce climate costs? (2012)
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