A low-carbon fuels standard is likely to do little to reduce global warming emissions and can even be counterproductive, according to a paper published in the American Economic Journal: Economic Policy.
The study, by three academics, found that the policy reduces consumption of high-carbon fuels like oil, but “increases low carbon fuel production, possibly increasing net carbon emissions.”
A low-carbon fuel standard requires that the mix of transportation fuels sold to automobiles or trucks include only a limited percentage of carbon-intensive fuels. The idea is to cut carbon emissions from driving, since transportation accounts for more than a quarter of the country’s greenhouse gas emissions.
California is furthest along in adopting a low-carbon fuels standard. A number of Northeastern states are also looking at the idea, as is the Midwest. A major climate change bill unveiled in the House this week also calls for a national low-carbon fuels standard.
The economic journal’s paper starkly concludes that a low-carbon fuel standard “cannot be efficient.”
One problem with a low-carbon fuel standard is that it could be extremely costly. The paper says that a 10 percent reduction in the carbon intensity of fuels could result in abatement costs ranging from $307 to $2,272 for each ton of carbon dioxide. That is roughly 100 to 700 times the price of carbon dioxide emissions allowances now traded in the Regional Greenhouse Gas Initiative, a program in 10 Northeastern states to combat global warming by cutting power plant emissions.
The Dahh factor
The easiest way to cut carbon emissions from transportation is to cut the level and “not drive so much,” Mr. Holland said. “Carpool! Take public transportation! Leave the car at home.” Read full from NY-Times blog