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Sonia Yeh - One of the best experts on this subject based on the ideXlab platform.
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a review of Low Carbon Fuel policies principles program status and future directions
Energy Policy, 2016Co-Authors: Sonia Yeh, Gabriel E. Lade, Julie Witcover, Daniel SperlingAbstract:A Low Carbon Fuel standard (LCFS) is a market-based policy that specifies declining standards for the average lifecycle Fuel Carbon intensity (AFCI) of transportation Fuels sold in a region. This paper: (i) compares transportation Fuel Carbon policies in terms of their economic efficiency, Fuel price impacts, greenhouse gas emission reductions, and incentives for innovation; (ii) discusses key regulatory design features of LCFS policies; and (iii) provides an update on the implementation status of LCFS policies in California, the European Union, British Columbia, and Oregon. The economics literature finds that an intensity standard implicitly taxes emissions and subsidizes output. The output subsidy results in an intensity standard being inferior to a Carbon tax in a first-best world, although the inefficiency can be corrected with a properly designed consumption tax (or mitigated by a properly designed Carbon tax or cap-and-trade program). In California, from 2011 to 2015 the share of alternative Fuels in the regulated transportation Fuels pool increased by 30%, and the reported AFCI of all alternative Fuels declined 21%. LCFS credit prices have varied considerably, rising to above $100/credit in the first half of 2016. LCFS programs in other jurisdictions share many features with California's, but have distinct provisions as well. (C) 2016 Elsevier Ltd. All rights reserved.
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Status Review of California's Low Carbon Fuel Standard, 2011-2015
2016Co-Authors: Sonia Yeh, Julie WitcoverAbstract:California’s Low Carbon Fuel Standard (LCFS) is an integral part of the overall strategy to reduce greenhouse gas (GHG) emissions in California. The primary objectives of an LCFS, sometimes referred to as a clean Fuel standard, are to: (i) reduce GHG emissions from the transportation sector; (ii) incentivize innovation, technological development, and deployment of Low-emission alternative Fuels and alternative Fuel vehicles; and (iii) provide a framework for regulating transportation sector GHG emissions within a broader portfolio of climate policies. This issue reviews LCFS compliance metrics from 2011 through 2015: transport Fuel energy and LCFS credits and deficits (Section 1), Carbon intensity of Fuels (Section 2), and credit trading and prices (Section 3). As special topics (Section 4), the authors provide a very brief review of existing Low Carbon Fuel standard (clean Fuel) programs in other jurisdictions, and briefly summarize a recent journal article on California compliance.
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A review of Low Carbon Fuel policies: Principles, program status and future directions
Energy Policy, 2016Co-Authors: Sonia Yeh, Gabriel E. Lade, Julie Witcover, Daniel SperlingAbstract:A Low Carbon Fuel standard (LCFS) is a market-based policy that specifies declining standards for the average lifecycle Fuel Carbon intensity (AFCI) of transportation Fuels sold in a region. This paper: (i) compares transportation Fuel Carbon policies in terms of their economic efficiency, Fuel price impacts, greenhouse gas emission reductions, and incentives for innovation; (ii) discusses key regulatory design features of LCFS policies; and (iii) provides an update on the implementation status of LCFS policies in California, the European Union, British Columbia, and Oregon. The economics literature finds that an intensity standard implicitly taxes emissions and subsidizes output. The output subsidy results in an intensity standard being inferior to a Carbon tax in a first-best world, although the inefficiency can be corrected with a properly designed consumption tax (or mitigated by a properly designed Carbon tax or cap-and-trade program). In California, from 2011 to 2015 the share of alternative Fuels in the regulated transportation Fuels pool increased by 30%, and the reported AFCI of all alternative Fuels declined 21%. LCFS credit prices have varied considerably, rising to above $100/credit in the first half of 2016. LCFS programs in other jurisdictions share many features with California's, but have distinct provisions as well.
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Status Review of California's Low Carbon Fuel Standard, 2011-2015: May 2016 Issue. Research Report UCD-ITS-RR-16-02
2016Co-Authors: Sonia Yeh, Julie WitcoverAbstract:From 2011–2015, the average Fuel Carbon intensity (AFCI) of all alternative Fuels reported to the program declined 21 percent, from near 86 grams Carbon dioxide equivalent per mega-joule of Fuel energy (gCO2e/MJ) to just over 68 gCO2e/MJ. Alternative Fuels contributed 6.2 percent of California’s transportation Fuels by energy content in 2011 and 2012, and reached 8.1 percent in 2015. Fuels other than liquid bioFuels comprised 10.9 percent of alternative Fuel transport energy in 2014 and 2015. From 2011–2015, the LCFS required a reduction of 9.2 million metric tons (MMT) CO2e from the baseline. The total emissions reductions reported for the same period was 16.8 MMT CO2e, or 7.4 MMT more than required by the regulation (overcomplying by 81 percent). Increases in alternative Fuel use came primarily from biodiesel, renewable diesel, biogas and electricity. Use of ethanol, the largest renewable Fuel by volume, remained close to a “blendwall” of 10 percent blended with gasoline, the maximum alLowed without alternative infrastructure. Total electric vehicle miles traveled (eVMT) in 2015 is estimated to be around 1.3 billion miles based on reported electricity consumption of 431 gigawatt-hours (GWh) or 13 million gasoline gallon equivalent (GGE). None of the 2.2 million gallons (1.5 million GGE) of cellulosic ethanol used in the U.S. in 2015 was consumed in California. LCFS credit prices have shown considerable variation. The average credit price was $20 early in the program (and while the standard was frozen at 1%). Prices have remained above $100/credit thus far in 2016. The overall nominal value of all credit transfers was calculated at $430 million (December 2012–April 2016). Other jurisdictions’ LCFS programs, including the European Union Fuel Quality Directive, the British Columbia Renewable & Low Carbon Fuel Requirements Regulation, and the Oregon Clean Fuels Program, share many features with California’s LCFS but have distinct provisions as well.
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Status Review of California’s Low Carbon Fuel Standard (Revised Version)
2015Co-Authors: Sonia Yeh, Julie Witcover, James BushnellAbstract:Author(s): Yeh, Sonia; Witcover, Julie; Bushnell, James | Abstract: This status review of California's Low Carbon Fuel Standard (LCFS) summarizes actions regarding the standard. Greenhouse gases are subject to regulation under the LCFS. Statistics are provided on credits and the price of credits; average Fuel Carbon intensity; ethanol production and consumption; the number and vehicle miles of travel of plug-in electric vehicles; and, gasoline prices. The California Air Resources Board will vote on re-adoption of the LCFS in July 2015 and major court decisions on LCFS, some leading to the need for the re-adoption vote, are summarized.
Julie Witcover - One of the best experts on this subject based on the ideXlab platform.
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Oregon’s Clean Fuels Program: A Review and Status Update:
Transportation Research Record: Journal of the Transportation Research Board, 2020Co-Authors: Julie Witcover, Colin W. MurphyAbstract:Oregon implemented a Fuel Carbon policy called the Clean Fuels Program (CFP) in 2016. Modeled largely on the Low Carbon Fuel Standard (LCFS) operated by California, the CFP sets a declining target ...
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Uncertainty, Innovation, and Infrastructure Credits: Outlook for the Low Carbon Fuel Standard Through 2030
2020Co-Authors: James Bushnell, Daniel Mazzone, Aaron Smith, Julie WitcoverAbstract:Author(s): Bushnell, James, PhD; Mazzone, Daniel; Smith, Aaron; Witcover, Julie | Abstract: California’s Low Carbon Fuel standard (LCFS) specifies that the state’s transportation Fuel supply achieve a 20% reduction in Carbon intensity (CI) beLow 2011 levels by 2030. Reaching the standard will require substantive changes in the Fuel mix, but the specifics and the cost of these changes are uncertain. We assess if and how California is likely to achieve the standard, and the likely impact of infrastructure credits on this compliance outlook. We begin by projecting a distribution of Fuel and vehicle miles demand under business-as-usual economic and policy variation and transform those projections into a distribution of LCFS net deficits for the entire period from 2019 through 2030. We then construct a variety of scenarios characterizing LCFS credit supply that consider different assumptions regarding input markets, technological adoption over the compliance period, and the efficacy of complementary policies. In our baseline scenario for credit generation, LCFS compliance would require that between 60% and 80% of the diesel pool be produced from biomass. Our baseline projections have the number of electric vehicles reaching 1.3 million by 2030, but if the number of electric vehicles reaches Governor Jerry Brown’s goal of 5 million by 2030, then LCFS compliance would require substantially less biomass-based diesel. Outside of rapid zero emission vehicle penetration, compliance in 2030 with the $200 credit price may be much more difficult. New mechanisms to alLow firms to generate credits by building electric vehicle charging stations or hydrogen Fueling stations have minor implications for overall compliance because the total quantity of infrastructure credits is restricted to be relatively small.
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Comparison of “Advanced” bioFuel cost estimates: Trends during rollout of Low Carbon Fuel policies
Transportation Research Part D: Transport and Environment, 2020Co-Authors: Julie Witcover, Robert B. WilliamsAbstract:Abstract Costs of producing “advanced” bioFuels (those with the Lowest GHG and land use impacts) have not decreased in recent years as envisioned by analysts. Despite aggressive policy incentives, no transition to a Lower cost mature industry has occurred. Information about the cost dynamics and sLow industry emergence is of major interest to policymakers and others seeking to understand the likely success – and cost – of incentive programs. This paper reviews literature on production cost at the plantgate – without considering taxes or delivery costs – for selected bioFuel technology pathways using a levelized cost of Fuel approach, applying common financing assumptions for capital amortization and converting all values to year 2016 dollars, and examines results in the current Low Carbon Fuel policy context. The average production cost estimate for cellulosic ethanol was $4 per gallon-gasoline equivalent (gge). For drop-in Fuels, the pyrolysis-biocrude-hydro treatment pathway had the Lowest average production cost estimate at about $3.25/gge. Biomass to liquid (BTL) production cost estimates averaged $3.80/gge, while hydrotreated esters and fatty acids (HEFA) – the sole Fuel studied gaining commercial traction – averaged about $3.70/gge. Estimate ranges did not alLow any definitive rank ordering of the Fuels by production cost. Production cost estimates are higher in later than in earlier publications for non-HEFA Fuels due primarily to higher costs for feedstock and capital expenditure components. This may reflect learning from early but largely unsuccessful commercialization efforts that yielded more realistic (and higher cost) information and detail on feedstock provision and conversion processes.
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Status Review of California’s Low Carbon Fuel Standard, 2011–2018 Q1 September 2018 Issue
2018Co-Authors: Julie WitcoverAbstract:From 2011–2017, the share of alternative Fuels in California’s transportation energy grew from 6.1 percent to 8.5 percent. Of alternative Fuel energy, the portion coming from non-liquid Fuels increased from 7.6 percent to 13.5 percent over the period. Through 2018 Q1, total emissions reduction requirements under the regulation were 28.9 million tons (MMT) CO2e. Actual reported emissions reductions were 38.3 MMT CO2e, representing overcompliance of 9.3 MMT CO2e, creating a system-wide credit “bank” that can be used to meet future targets. In 2017 and 2018 Q1, program deficits exceeded credits for the first time, by 0.1 MMT CO2e and 0.4 MMT CO2e, respectively, drawing down the credit “bank.” Increases in alternative Fuel use and declines in Carbon intensity (CI) rating came primarily from the diesel pool. Biomass-based diesel—biodiesel and renewable diesel—accounted for 0.4 percent of liquid diesel Fuel by volume in 2011 and 15.6 percent in 2018 Q1. Natural gas in transportation grew 111 percent from 2011–2017 to 178.1 gasoline gallon equivalent (gge). Of this natural gas, biogas use was close to nil in 2011 but approximately two-thirds in 2017. Among gasoline substitutes, electricity use grew from less than 0.5 percent of alternative energy in 2011 to 4.5 percent in 2018 Q1. Use of ethanol, the largest renewable Fuel by volume, remained close to a “blendwall” of 10 percent blended with gasoline. Prices of LCFS compliance credits (each representing 1 MMT CO2e) fluctuated. Average per- credit price increased from $20 to $80 in 2013, ranged between $20 and $30 in 2014 and 2015 under a frozen standard of 1%, rose above $100 in 2016 when the freeze was lifted, and exceeded $160 in summer 2018 as the California Air Resources Board (CARB) was in the process of adopting more stringent targets for 2030. LCFS amendments to be voted on at the September 26-27, 2018, CARB board meeting to take effect in 2019, include: a 2030 target of 20 percent CI reduction beLow 2010 levels; independent verification and monitoring of Fuel pathway CI rating inputs; alLowing alternative aviation Fuel to generate program credits; a protocol for Carbon capture and sequestration credits; credits for Low- or zero-Carbon intensity electricity use; requiring use of a portion of residential electricity credits to fund a statewide point-of-sale incentive program to electric vehicle (EV) buyers if such a program is approved by the California Public Utilities Commission; and introducing capacity credits for EV fast chargers and hydrogen Fuel stations. The “capacity credit” provision would permit credit generation untied to current emissions reductions and favor particular Fuels (those used in zero emission vehicles, which have no tailpipe emissions) for the first time. LCFS-like programs are in development in Canada (a Clean Fuel Standard to cover transportation, industry, and building sectors) and Brazil (the RenovaBio program focused on renewable liquid Fuels and biogas). Neither plans to account for indirect land use change emissions in Carbon intensity lifecycle analysis at program outset. Implementation of the Oregon and British Columbia LCFS programs is proceeding. Click here to see all the California LCFS status reviews
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BioFuel Tracker: Capacity for Low Carbon Fuel Policies – Assessment through 2018
2017Co-Authors: Julie Witcover, Robert B. WilliamsAbstract:Author(s): Witcover, Julie; Williams, Robert B. | Abstract: This BioFuel Tracker: Capacity for Low Carbon Fuel Policies – Assessment through 2018 report folLows the discontinued annual Advanced BioFuel Market Report produced by E2. This new report updates information on transportation bioFuel production capacity since E2’s final publication in 2015. The report provides information on market plans for near‐term production capacity through 2018. It is neither a prediction nor a forecast of either capacity or actual production levels. Rather, it is one indication of potential North American production of Fuel volume that meets the California Carbon intensity rating cut‐off in the next couple of years, given favorable market conditions and the current policy environment. For commercially emerging technologies and Fuels, production capacity ranges are assessed based on company and media reports, and are filtered through a subjective evaluation of the likelihood of announced capacity coming online in the 2018 time frame. The Low end of the production capacity range reflects capacity in which the authors have higher confidence: existing capacity plus companies that have shown signs of plans to move forward on the ground. The high end of the production capacity range includes capacity from companies that is assessed as less likely: from companies that still face some significant hurdle (e.g., financing) to meet targets or have not pinned down target dates due to unfavorable market conditions. Well‐established technologies and Fuels like biodiesel are treated separately. In the case of biodiesel, production is determined by policy more than it is constrained by capacity. Therefore, the focus of this report is on describing the policies and other industry trends. The report includes information on private and public financing levels for bioFuels, drawing, like the E2 series, on Clean Tech Group’s industry financial data plus government data, through 2015.
Nathan Parker - One of the best experts on this subject based on the ideXlab platform.
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California Low Carbon Fuel policies and natural gas Fueling infrastructure: Synergies and challenges to expanding the use of RNG in transportation
Energy Policy, 2017Co-Authors: Daniel Scheitrum, Amy Myers Jaffe, Rosa's Dominguez-faus, Nathan ParkerAbstract:Abstract The emergence of natural gas as an abundant, inexpensive Fuel in the U.S. raises the possibility that expanding natural gas infrastructure could enable a transition to other Low Carbon Fuels. We assess how California's existing Fuels policies interact with expanding natural gas infrastructure in the state to promote renewable natural gas resource development in the state. We employ a profit-maximizing mixed-integer linear programming optimization to solve for development of natural gas reFueling infrastructure incorporating spatial and temporal considerations and estimate the associated expansion in natural gas Fuel demand in California. We investigate whether renewable Fuel and Carbon pollution credit markets create sufficient incentive to promote shifting to renewable natural gas Fuel to replace vehicular natural gas demand. An assessment of California's current policies is undertaken and alternative policy options to enhance market efficiency are discussed. These policies include improvements to state regulations of waste disposal, incentives for fleets to shift to sustainable Fuel trucks, and mechanisms to Lower connection costs for in-state renewable natural gas into the California natural gas pipeline grid.
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Renewable Natural Gas as a Solution to Climate Goals: Supply Estimates and Response to California’s Low Carbon Fuel Standard
2016Co-Authors: Daniel Scheitrum, Nathan ParkerAbstract:Natural gas is a growing portion of transportation Fuel consumed in California. While, natural gas has a slight environmental benefit relative to the use of conventional liquid Fuels such as gasoline and diesel, the environmental performance of natural gas can be greatly improved by procuring the gas from renewable sources. We estimate the supply curves of producing natural gas from four renewable sources: (1) dairy manure, (2) municipal solid waste, (3) wastewater treatment plants, and (4) landfill gas. We also evaluate how the production of RNG will respond to California's Low Carbon Fuel Policy (LCFS) and compare the welfare impacts of the LCFS policy to an equivalent Carbon tax.
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Unintended Consequences of Carbon Policies: Transportation Fuels, Land-Use, Emissions, and Innovation
The Energy Journal, 2015Co-Authors: Stephen P Holland, Jonathan E Hughes, Christopher R Knittel, Nathan ParkerAbstract: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 effects of the RFS, LCFS and subsidies, effects that would be less severe under a CAT policy.
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Unintended Consequences of Transportation Carbon Policies: Land-Use, Emissions, and Innovation
2013Co-Authors: Stephen P Holland, Jonathan E Hughes, Christopher R Knittel, Nathan ParkerAbstract: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.
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Assessment of technologies to meet a Low Carbon Fuel standard.
Environmental science & technology, 2009Co-Authors: Sonia Yeh, Nic Lutsey, Nathan ParkerAbstract:California's Low Carbon Fuel standard (LCFS) was designed to incentivize a diverse array of available strategies for reducing transportation greenhouse gas (GHG) emissions. It provides strong incentives for Fuels with Lower GHG emissions, while explicitly requiring a 10% reduction in California's transportation Fuel GHG intensity by 2020. This paper investigates the potential for cost-effective GHG reductions from electrification and expanded use of bioFuels. The analysis indicates that Fuel providers could meetthe standard using a portfolio approach that employs both bioFuels and electricity, which would reduce the risks and uncertainties associated with the progress of cellulosic and battery technologies, feedstock prices, land availability, and the sustainability of the various compliance approaches. Our analysis is based on the details of California's development of an LCFS; however, this research approach could be generalizable to a national U.S. standard and to similar programs in Europe and Canada.
Daniel Sperling - One of the best experts on this subject based on the ideXlab platform.
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a review of Low Carbon Fuel policies principles program status and future directions
Energy Policy, 2016Co-Authors: Sonia Yeh, Gabriel E. Lade, Julie Witcover, Daniel SperlingAbstract:A Low Carbon Fuel standard (LCFS) is a market-based policy that specifies declining standards for the average lifecycle Fuel Carbon intensity (AFCI) of transportation Fuels sold in a region. This paper: (i) compares transportation Fuel Carbon policies in terms of their economic efficiency, Fuel price impacts, greenhouse gas emission reductions, and incentives for innovation; (ii) discusses key regulatory design features of LCFS policies; and (iii) provides an update on the implementation status of LCFS policies in California, the European Union, British Columbia, and Oregon. The economics literature finds that an intensity standard implicitly taxes emissions and subsidizes output. The output subsidy results in an intensity standard being inferior to a Carbon tax in a first-best world, although the inefficiency can be corrected with a properly designed consumption tax (or mitigated by a properly designed Carbon tax or cap-and-trade program). In California, from 2011 to 2015 the share of alternative Fuels in the regulated transportation Fuels pool increased by 30%, and the reported AFCI of all alternative Fuels declined 21%. LCFS credit prices have varied considerably, rising to above $100/credit in the first half of 2016. LCFS programs in other jurisdictions share many features with California's, but have distinct provisions as well. (C) 2016 Elsevier Ltd. All rights reserved.
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A review of Low Carbon Fuel policies: Principles, program status and future directions
Energy Policy, 2016Co-Authors: Sonia Yeh, Gabriel E. Lade, Julie Witcover, Daniel SperlingAbstract:A Low Carbon Fuel standard (LCFS) is a market-based policy that specifies declining standards for the average lifecycle Fuel Carbon intensity (AFCI) of transportation Fuels sold in a region. This paper: (i) compares transportation Fuel Carbon policies in terms of their economic efficiency, Fuel price impacts, greenhouse gas emission reductions, and incentives for innovation; (ii) discusses key regulatory design features of LCFS policies; and (iii) provides an update on the implementation status of LCFS policies in California, the European Union, British Columbia, and Oregon. The economics literature finds that an intensity standard implicitly taxes emissions and subsidizes output. The output subsidy results in an intensity standard being inferior to a Carbon tax in a first-best world, although the inefficiency can be corrected with a properly designed consumption tax (or mitigated by a properly designed Carbon tax or cap-and-trade program). In California, from 2011 to 2015 the share of alternative Fuels in the regulated transportation Fuels pool increased by 30%, and the reported AFCI of all alternative Fuels declined 21%. LCFS credit prices have varied considerably, rising to above $100/credit in the first half of 2016. LCFS programs in other jurisdictions share many features with California's, but have distinct provisions as well.
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National Low Carbon Fuel Standard: Policy Design Recommendations
SSRN Electronic Journal, 2012Co-Authors: Daniel Sperling, Siwa Msangi, James Rhodes, Michael Griffin, Paul N. Leiby, Madhu Khanna, Jonathan RubinAbstract:The abundance and Low cost of petroleum over the past 150 years has enabled rapid economic growth and extraordinary mobility advancements. But dependence on petroleum Fuels also has large downsides, including dependence on insecure supplies, volatile prices causing high economic costs, polluted and unhealthy air, climate change, and increasing threats to local environments as production moves into more fragile areas. The transition to Low-Carbon alternative transportation Fuels is becoming more urgent. But their introduction is inhibited by a long list of market conditions and failures. These include sunk investments and technology lock-in by the automotive and energy industries, other forms of technological and market inertia impeding investments in deployment and R&D, cartel pricing, and the failure of markets to assign a price to greenhouse gas (GHG) emissions. Various policies might be adopted to overcome these market conditions and barriers, ranging from pure market instruments such as Carbon taxes to prescriptive mandates and voluntary actions. Each has different advantages and disadvantages. Some are easier to implement administratively, some are more economically efficient, and some are more effective in accelerating investments. None is perfect. One of the most compelling, assuming some level of urgency, is a broad, performance-based policy that targets greenhouse gas reduction — what we refer to as a Low Carbon Fuel standard (LCFS). In this report, we integrate scientific knowledge of alternative Fuels — including an assessment of economic, administrative, institutional, equity, political, and technological considerations — to aid us in proposing a policy design for an LCFS for the United States. We have aimed for a policy design that would be effective, economically efficient, and broadly acceptable. An LCFS is a policy designed to accelerate the transition to Low-Carbon alternative transportation Fuels by stimulating innovation and investment in new Fuels and technologies. The goal is to provide a durable policy framework that will stimulate innovation and technological development. Since 2007, variations of an LCFS policy have been adopted by California, the European Union (Fuel Quality Directive, FQD), and British Columbia (Renewable and Low-Carbon Fuel Requirement Regulation, RLCFRR). Other states in the United States have been exploring the adoption of an LCFS policy, including states in the Midwest and the Northeast/Mid-Atlantic region, and the states of Oregon and Washington. The design of an LCFS is premised on the use of technology-neutral performance targets and credit trading, with the intent of harnessing market forces and providing industry with flexibility. It is also premised on the use of life-cycle measurements of GHG emissions, to assure that emissions are regulated effectively and scientifically. An LCFS is a hybrid of a regulatory and market policy instrument. It does not include mandates for any particular Fuel or technology and as such does not attempt to pick winners or losers. Instead, it defines an average emissions intensity standard — measured in grams CO2 equivalent per mega-joule of Fuel energy (gCO2e/MJ) — that all energy providers must achieve across all Fuels they provide. Many options exist for meeting the standard. Regulated parties are free to employ any combination of strategies that suits their particular circumstances and perspectives — including the purchase of credits from other companies. The breadth and reach of an LCFS, and the challenge of implementing an innovative policy, means that adoption of a national LCFS will not be easy or straightforward and will require careful analysis and design. It is necessary to address the cost-effectiveness of the policy (compared with other similar GHG policies) and to analyze ease of administration, fairness, equity, market flexibility, and impacts on energy security and sustainability. We have done so in a companion report, National Low Carbon Fuel Standard: Technical Analysis Report (TAR). This Policy Design Recommendations (PDR) report builds on insights and findings from the TAR. BeLow we recommend key policy design principles that chart a path toward developing a national LCFS policy.
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Toward a Global Low Carbon Fuel Standard for Road Transport
Energy Transport & the Environment, 2012Co-Authors: Daniel Sperling, Sonia YehAbstract:A new policy instrument, known as a Low Carbon Fuel standard (LCFS), is a promising approach to deCarbonize transportation Fuels. An LCFS has several important features: it applies a life cycle Carbon intensity standard, incorporates market mechanisms by alLowing credit trading, and targets all transport Fuels. A harmonized international framework is needed that builds on newly enacted LCFS policies adopted in California and the European Union.
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National Low Carbon Fuel Standard: Technical Analysis Report
SSRN Electronic Journal, 2012Co-Authors: Sonia Yeh, Michael Griffin, Paul N. Leiby, Madhu Khanna, Daniel Sperling, Miroslav Batka, Haixiao Huang, Matt Kocoloski, Gouri Shankar Mishra, Siwa MsangiAbstract:Petroleum Fuels make up essentially all of the transportation Fuels used today. But fossil Fuel use has many economic and environmental downsides, including a weakening of our energy security due to reliance on imported energy sources, air pollution that impacts health, and greenhouse gas (GHG) emissions that contribute to climate change. To reduce fossil Fuel use and GHG emissions in the transportation sector and improve energy security requires a coordinated effort to reduce travel demand, improve vehicle efficiency, and switch to cleaner, Lower-Carbon Fuels. Here we focus on switching to new Fuels and examine the potential role a national Low Carbon Fuel standard (LCFS) can play in bringing this about.This report analyzes the costs and benefits of a national LCFS policy, together with or in place of the existing national Renewable Fuel Standard (RFS2). The companion report, National Low Carbon Fuel Standard: Policy Design Recommendations (PDR), suggests how best to design an LCFS. Both consider the possibility of an LCFS replacing or being adopted alongside RFS2.
Jonathan Rubin - One of the best experts on this subject based on the ideXlab platform.
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Regional Credit Trading: Economic and Greenhouse Gas Impacts of a National Low Carbon Fuel Standard
Transportation Research Record, 2014Co-Authors: Jonathan Rubin, Paul Leiby, Maxwell BrownAbstract:The economic implications of various designs for a U. S. national Low Carbon Fuel standard (NLCFS) for the road transportation sector are examined. An NLCFS based on the average Carbon intensity (CI) of all Fuels sold in the gasoline and diesel markets generates an incentive for Fuel suppliers to reduce the measured CI of their petroleum Fuels. Recent work examined the implications of different designs for an NLCFS in terms of compliance costs, credit price volatility, energy security, and possible savings from different credit trading systems for the on-road transportation sector. This paper builds on previous nationally aggregated modeling by taking into account regional differences in the supply, CI, and price of Fuels. The impact of California's regional LCFS on compliance costs of an NLCFS is also examined. Significantly different costs are found for compliance by region. At the same time, flexibility mechanisms in terms of credit trading and banking can Lower costs substantially.
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Energy security implications of a national Low Carbon Fuel standard
Energy Policy, 2013Co-Authors: Paul N. Leiby, Jonathan RubinAbstract:This paper discusses the potential energy security implications of a national Low Carbon Fuel standard (NLCFS). A Low Carbon Fuel standard is designed to reduce greenhouse gas (GHG) emissions by targeting the Fuel portion of the Fuel-vehicle system. Specifically, a NLCFS would set national targets for the average Carbon intensity (CI) of motor Fuels, and establish a market for credits that alLows Fuel producers and importers to respond in a variety of ways to the signal provided by the credit price. An important method for Lowering the CI of transportation is to substitute Lower-Carbon alternative Fuels such as advanced bioFuels, electricity, CNG, and H2. Despite the focus on GHGs, so long as transportation Fuels remain dominated by petroleum, transportation Fuel policies like a NLCFS also will be evaluated in terms of their energy security impacts. We examine the Fuel substitutions that are projected to be induced by a NLCFS and consider the energy security implications of displacing higher Carbon Fuels, such as imported Canadian Oil Sands oil or certain imported crude oils, with Lower-Carbon domestic oil, bioFuels, or Lower Carbon oil imported from other sources.
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Tradable credits system design and cost savings for a national Low Carbon Fuel standard for road transport
Energy Policy, 2013Co-Authors: Jonathan Rubin, Paul LeibyAbstract:This research examines the economic implications of different designs for a national Low Carbon Fuel standard (NLCFS) for the road transportation sector. A NLCFS based on the average Carbon Intensity (CI) of all Fuels sold generates an incentive for Fuel suppliers to reduce the measured CI of their Fuels. The economic impacts are determined by the availability of Low Carbon Fuels, estimates of which can vary widely. Also important are the compliance path, reference level CI, and the design of the credit system, particularly the opportunities for trading and banking. To quantitatively examine the implications of a NLCFS, we created the Transportation Regulation and Credit Trading (TRACT) Model. With TRACT, we model a NLCFS credit trading system among profit maximizing Fuel suppliers for light- and heavy-duty vehicle Fuel use for the United States from 2012 to 2030. We find that credit trading across gasoline and diesel Fuel markets can Lower the average costs of Carbon reductions by an insignificant amount to 98% depending on forecasts of bioFuel supplies and Carbon intensities. Adding banking of credits on top of trading can further Lower the average cost of Carbon reductions by 5%–9% and greatly reduce year-to-year fluctuations in credit prices.
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National Low Carbon Fuel Standard: Policy Design Recommendations
SSRN Electronic Journal, 2012Co-Authors: Daniel Sperling, Siwa Msangi, James Rhodes, Michael Griffin, Paul N. Leiby, Madhu Khanna, Jonathan RubinAbstract:The abundance and Low cost of petroleum over the past 150 years has enabled rapid economic growth and extraordinary mobility advancements. But dependence on petroleum Fuels also has large downsides, including dependence on insecure supplies, volatile prices causing high economic costs, polluted and unhealthy air, climate change, and increasing threats to local environments as production moves into more fragile areas. The transition to Low-Carbon alternative transportation Fuels is becoming more urgent. But their introduction is inhibited by a long list of market conditions and failures. These include sunk investments and technology lock-in by the automotive and energy industries, other forms of technological and market inertia impeding investments in deployment and R&D, cartel pricing, and the failure of markets to assign a price to greenhouse gas (GHG) emissions. Various policies might be adopted to overcome these market conditions and barriers, ranging from pure market instruments such as Carbon taxes to prescriptive mandates and voluntary actions. Each has different advantages and disadvantages. Some are easier to implement administratively, some are more economically efficient, and some are more effective in accelerating investments. None is perfect. One of the most compelling, assuming some level of urgency, is a broad, performance-based policy that targets greenhouse gas reduction — what we refer to as a Low Carbon Fuel standard (LCFS). In this report, we integrate scientific knowledge of alternative Fuels — including an assessment of economic, administrative, institutional, equity, political, and technological considerations — to aid us in proposing a policy design for an LCFS for the United States. We have aimed for a policy design that would be effective, economically efficient, and broadly acceptable. An LCFS is a policy designed to accelerate the transition to Low-Carbon alternative transportation Fuels by stimulating innovation and investment in new Fuels and technologies. The goal is to provide a durable policy framework that will stimulate innovation and technological development. Since 2007, variations of an LCFS policy have been adopted by California, the European Union (Fuel Quality Directive, FQD), and British Columbia (Renewable and Low-Carbon Fuel Requirement Regulation, RLCFRR). Other states in the United States have been exploring the adoption of an LCFS policy, including states in the Midwest and the Northeast/Mid-Atlantic region, and the states of Oregon and Washington. The design of an LCFS is premised on the use of technology-neutral performance targets and credit trading, with the intent of harnessing market forces and providing industry with flexibility. It is also premised on the use of life-cycle measurements of GHG emissions, to assure that emissions are regulated effectively and scientifically. An LCFS is a hybrid of a regulatory and market policy instrument. It does not include mandates for any particular Fuel or technology and as such does not attempt to pick winners or losers. Instead, it defines an average emissions intensity standard — measured in grams CO2 equivalent per mega-joule of Fuel energy (gCO2e/MJ) — that all energy providers must achieve across all Fuels they provide. Many options exist for meeting the standard. Regulated parties are free to employ any combination of strategies that suits their particular circumstances and perspectives — including the purchase of credits from other companies. The breadth and reach of an LCFS, and the challenge of implementing an innovative policy, means that adoption of a national LCFS will not be easy or straightforward and will require careful analysis and design. It is necessary to address the cost-effectiveness of the policy (compared with other similar GHG policies) and to analyze ease of administration, fairness, equity, market flexibility, and impacts on energy security and sustainability. We have done so in a companion report, National Low Carbon Fuel Standard: Technical Analysis Report (TAR). This Policy Design Recommendations (PDR) report builds on insights and findings from the TAR. BeLow we recommend key policy design principles that chart a path toward developing a national LCFS policy.
