EconPapers    
Economics at your fingertips  
 

Unintended Consequences of Transportation Carbon Policies: Land-Use, Emissions, and Innovation

Stephen Holland (), Jonathan Hughes (), Christopher Knittel () and Nathan C. Parker

No 19636, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Renewable fuel standards, low carbon fuel standards, and ethanol subsidies are popular policies to incentivize ethanol production and reduce emissions from transportation. Compared to carbon trading, these policies lead to large shifts in agricultural activity and unexpected social costs. We simulate the 2022 Federal Renewable Fuel Standard (RFS) and find that energy crop production increases by 39 million acres. Land- use costs from erosion and habitat loss are between $277 and $693 million. A low carbon fuel standard (LCFS) and ethanol subsidies have similar effects while costs under an equivalent cap and trade (CAT) system are essentially zero. In addition, the alternatives to CAT magnify errors in assigning emissions rates to fuels and can over or under-incentivize innovation. These results highlight the potential negative efficiency effects of the RFS, LCFS and subsidies, effects that would be less severe under a CAT policy.

JEL-codes: H4 Q2 Q4 Q5 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-ino, nep-reg, nep-res and nep-tre
Note: EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Published as Stephen P. Holland & Jonathan E. Hughes & Christopher R. Knittel & Nathan C. Parker, 2015. "Unintended Consequences of Carbon Policies: Transportation Fuels, Land-Use, Emissions, and Innovation," The Energy Journal, vol 36(3).

Downloads: (external link)
http://www.nber.org/papers/w19636.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:19636

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w19636

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2022-12-21
Handle: RePEc:nbr:nberwo:19636