The Experts below are selected from a list of 5904 Experts worldwide ranked by ideXlab platform
Jay P. Kesan - One of the best experts on this subject based on the ideXlab platform.
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an empirical study of the impact of the Renewable Fuel Standard rfs on the production of Fuel ethanol in the u s
Utah law review, 2017Co-Authors: Jay P. Kesan, Hsiaoshan Yang, Isabel Freitas PeresAbstract:The Renewable Fuel Standard (RFS) program, which mandates the commercialization of bioFuels through 2022, is the United States’ most significant piece of legislation regarding Renewable energy. It was first passed in 2005 and revised and expanded in 2007 in order to create a viable market for bioFuels based on the policy goals of enhancing domestic U.S. energy security, reducing transportation-related greenhouse gas (GHG) emissions, and stimulating rural economic development. The RFS requires minimum levels of consumption for different kinds of bioFuels and requires increasing blending amounts of bioFuels into gasoline and diesel Fuels by producers and importers each year. Mandates and targets for bioFuels as required by the RFS are not a policy exclusive just to the U.S. Sixty-four other countries mandate fixed quantities of ethanol use in gasoline to generally stimulate Renewable energy use and to specifically promote production of bioFuels. In the past few years, there have been challenges in complying with the RFS in the U.S. As a result, legislative mandates were modified and reduced to respond to these difficulties. Proponents of the RFS argue that the policy reduces the risk of investing in Renewable Fuel projects, enhances the country’s energy security as well as the rural sector, and addresses climate change concerns. On the other hand, critics argue that policy makers are “picking a winner” by funding bioFuels over other types of alternative energy sources, and mandates for bioFuels have presented unintended consequences in other areas, such as the food markets, land use patterns and the current gasoline-market infrastructure. Many studies have observed beneficial impacts of mandates on the agricultural markets and on the environment. However, there are very few empirical studies of the actual impact of the RFS on the development of the bioFuel industry and none that use an industrial policy approach to analyze this issue. In this Article, we intend to fill this gap and provide an empirical study addressing whether the RFS is an effective policy instrument that incentivizes an efficient and sustainable development of the bioFuels industry. Our analysis uses data from the first-generation ethanol industry between the years 2000 and 2013, and we find that the industry life cycle mediates the effects of the RFS in contributing to production-related economies of scale. More specifically, our empirical findings suggest that the RFS had a significant positive effect on the production capacity of firstgeneration ethanol firms during the early stages of development of the first-generation ethanol industry. But the RFS does not have a statistically significant effect on plant or firm capacity after the first-generation ethanol market entered a mature stage in its product life cycle.
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the Renewable Fuel Standard 3 0 moving forward with the federal bioFuel mandate
Social Science Research Network, 2014Co-Authors: Timothy A. Slating, Jay P. KesanAbstract:Increased reliance on Renewable energy technologies remains the best approach to mitigate the environmental and social problems associated with the unsustainable use of finite fossil Fuels for our energy needs. The Renewable Fuel Standard (“RFS” or “Standard”) exists as a pioneering pillar in the realm of federal incentives for Renewable energy technologies, particularly bioFuels. By mandating the commercialization of socially beneficial bioFuels, it: (1) improves the environment by reducing climate change inducing greenhouse gas emissions from the transportation sector; (2) increases U.S. energy security by reducing petroleum imports from hostile foreign regions; and (3) serves as a driver for much needed economic development. Moreover, it does this through an exceptionally elegant regulatory regime, which imposes its costs on the petroleum industry and, as such, has very little impact on the federal budget. But a political storm is beginning to brew over the continued implementation and existence of the RFS. Petroleum-related interests, who vehemently oppose the RFS for obvious reasons, continue to outspend the lobbying efforts of stakeholders who support it and the food industry, which continues to cling to the increasingly empirically refuted notion that bioFuels have an enormous impact on food prices, are using the 2012 draught as a rallying cry for waiving the RFS’s requirements. Congress is beginning to head the call and has considered an increasing number of Bills seeking to either modify or repeal the Standard.In this Article, we provide a thorough analysis of all issues facing the continued implementation and existence of the RFS. We first set out background information on bioFuels in general and then provide a detailed overview of the enactment, creation, and implementation of the RFS’s regulatory regime. Second, we present a political economy analysis of altering the RFS, where we detail the preferences, critiques, and relative political bargaining power of all affected stakeholders. Next, we detail and comment on all legislative attempts to modify or repeal the RFS that Congress has considered in its current term. Finally, we provide our justified recommendations, which include legislative and administrative reform proposals for moving forward with the Standard. Specifically, we recommend that the bioFuel categories under the RFS be expanded to include socially beneficial biomass sourcing at volumetric target levels consistent with current production and blending realities.
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the effects of the Renewable Fuel Standard rfs on the production of Fuel ethanol in the u s
Social Science Research Network, 2013Co-Authors: Jay P. Kesan, Timothy A. Slating, Hsiaoshan YangAbstract:The Renewable Fuel Standard (RFS) program, which mandates the commercialization of bio-Fuels through 2022, is the U.S.’s most significant Renewable energy policy. It was first established in 2005 in order to create a viable market for bio-Fuels based on the policy goals of enhancing U.S. energy security, reducing transportation-related GHG emissions, and stimulating rural economic development. In this Paper, we provide the first empirical study addressing whether the RFS is an effective policy instrument to incentivize the efficient development of an economically sustainable bio-Fuels industry. Our analysis focuses on data associated with the first-generation bio-ethanol industry and suggests that the RFS contributes to increasing production-related economies of scale. More specifically, our empirical findings suggest that the RFS has a positive significant effect on: (1) the survival rate of first-generation bio-ethanol plants; and (2) the production capacity of first-generation bio-ethanol plants.
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mandatory demand as a policy instrument the case of the Renewable Fuel Standard rfs bioFuel program
Social Science Research Network, 2012Co-Authors: Jay P. Kesan, Timothy A. Slating, Hsiaoshan YangAbstract:The U.S. Congress established the Renewable Fuel Standard (RFS) program, which mandates a certain volume of bioFuel consumption from 2006-2022, in an effort to enhance U.S. energy security, reduce transportation-related GHG emissions, and stimulate rural economic development. In this Paper, we assess the RFS from the viewpoint of industrial policy and provide the first empirical study addressing whether the RFS is an effective policy instrument to incentivize the development of the nascent bioFuels industry. Our analysis focuses on data associated with the first-generation bioethanol industry and suggests that the RFS contributes to increasing economies of scale and improving the competition level among existing firms. More specifically, our empirical analysis suggests that: (1) the RFS has a positive significant effect on the capacity of first-generation bioethanol plants; and (2) the RFS positively affects the survival rate of first-generation bioethanol plants.
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A legal analysis of the effects of the Renewable Fuel Standard (RFS2) and Clean Air Act on the commercialization of biobutanol as a transportation Fuel in the United States
Gcb Bioenergy, 2012Co-Authors: Timothy A. Slating, Jay P. KesanAbstract:Biobutanol is currently a hot topic within discussions about second-generation bioFuels. Its advocates point to the fact that it possesses a higher energy content than traditional bioethanol and, most importantly, that it is compatible with existing Fuel distribution infrastructure. While traditional biobutanol production processes have long since suffered from an inability to produce it in an economically viable manner, several recent technological advances have spurred interest from the private sector and several companies are now actively pursuing the commercialization of biobutanol as a transportation Fuel. As such, a legal analysis of the regulatory frameworks affecting this commercialization is highly relevant. In this study, we detail and analyze the two most import regulatory frameworks affecting the successful commercialization of biobutanol as a transportation Fuel in the United States. First, we provide a thorough description of the US Renewable Fuel Standard (RFS2) and analyze its impact on biobutanol commercialization efforts. Next, we address the US Clean Air Act’s so-called ‘substantially similar’ prohibition and detail the three distinct regulatory paths it creates for biobutanol commercialization. Finally, we conclude by exploring ways in which these regulatory frameworks could be altered to mitigate unjustified regulatory burdens. While our study focuses on the commercialization of biobutanol, its regulatory descriptions and analysis are equally informative in regards to the commercialization of other alcohol-based bioFuels.
Christopher R. Knittel - One of the best experts on this subject based on the ideXlab platform.
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The Pass-Through of RIN Prices to Wholesale and Retail Fuels under the Renewable Fuel Standard
Journal of the Association of Environmental and Resource Economists, 2017Co-Authors: Christopher R. Knittel, Ben S. Meiselman, James H. StockAbstract:AbstractThe US Renewable Fuel Standard (RFS) requires blending increasing quantities of bioFuels into the surface vehicle Fuel supply. The RFS requirements are met through a system of tradable permits called Renewable (Fuel) Identification Numbers, or RINs. We exploit the large fluctuations in RIN prices during 2013–15 to estimate the pass-through of RIN prices to US wholesale and retail Fuel prices. We control for common factors by examining spreads of physically similar Fuels with different RIN obligations. Pooling six different wholesale petroleum Fuel spreads, we estimate a pooled long-run or equilibrium pass-through coefficient of 1.00 with a Standard error of 0.11. This pass-through occurs within two business days. The only Fuel for which we find economically and statistically significant failure of pass-through is retail E85, which contains up to 83% ethanol; the pass-through of RIN prices to the retail E85–E10 spread is precisely estimated to be close to zero.
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some inconvenient truths about climate change policy the distributional impacts of transportation policies
The Review of Economics and Statistics, 2015Co-Authors: Stephen P Holland, Jonathan E Hughes, Christopher R. Knittel, Nathan ParkerAbstract:Abstract Climate policy has favored costly measures that implicitly or explicitly subsidize lowcarbon Fuels.We simulate four transportation sector policies: cap and trade (CAT), ethanol subsidies, a Renewable Fuel Standard (RFS), and a lowcarbon Fuel Standard. Our simulations confirm that alternatives to CAT are 2.5 to 4 times more costly but are amenable to adoption due to right-skewed distributions of gains. We analyze voting on the Waxman-Markey (WM) CAT bill. Conditional on a district’s CAT gains, a district’s RFS gains are negatively correlated with the likelihood of voting for WM. Our analysis supports campaign contributions as a partial mechanism.
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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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the pass through of rin prices to wholesale and retail Fuels under the Renewable Fuel Standard
Research Papers in Economics, 2015Co-Authors: Christopher R. Knittel, Ben S. Meiselman, James H. StockAbstract:The U.S. Renewable Fuel Standard (RFS) requires blending increasing quantities of bioFuels into the U.S. surface vehicle Fuel supply. In 2013, the fraction of ethanol in the gasoline pool effectively reached 10%, the ethanol capacity of the dominant U.S. gasoline blend (the “E10 blend wall”). During 2013-2015, the price of RINs—tradeable electronic certificates for complying with the RFS—fluctuated through a wide range, largely because of changes in actual and expected policy combined with learning about the implications of the E10 blend wall. RINs are sold by bioFuels producers and purchased by obligated parties (refiners and importers), who must retire RINs in proportion to the petroleum they sell for surface transportation. As a result, RINs in effect serve as a charge on obligated Fuels and a corrective subsidy for lower-carbon Renewable Fuels, and are neutral for Fuels outside the RFS. In theory, RIN prices provide incentives to consumers to use Fuels with a high Renewable content and to bioFuels producers to produce those Fuels, and as such are a key mechanism of the RFS. This paper examines the extent to which RIN prices are passed through to the price of obligated Fuels, and provides econometric results that complement the graphical analysis in Burkholder (2015). We analyze daily data on RINs and Fuel prices from January 1, 2013 through March 10, 2015. When we examine wholesale prices on comparable obligated and non-obligated Fuels, for example the spread between diesel and jet Fuel in the U.S. Gulf, we find that that roughly one-half to three-fourths of a change in RIN prices is passed through to obligated Fuels in the same day as the RIN price movement, and this fraction rises over the subsequent few business days. Using six different wholesale spreads between obligated and non-obligated Fuels, we estimate a pooled long-run pass-through coefficient of 1.01 with a Standard error of 0.12. We also examine the transmission of RIN prices to retail Fuel prices. The net RIN obligation on E10 is essentially zero over this period, and indeed we find no statistical evidence linking changes in RIN prices to changes in E10 prices. We also examine the price of E85 which, with an estimated average of 74% ethanol, generates more RINs than it obligates and thus in principle receives a large RIN subsidy. In contrast to the foregoing results, which are consistent with theory, the pass-through of RIN prices to the E85-E10 spread is precisely estimated to be zero if one adjusts for seasonality (as we argue should be done), or if not, is at most 30%. Over this period, on average high RIN prices did not translate into discounted prices for E85.
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the pass through of rin prices to wholesale and retail Fuels under the Renewable Fuel Standard
Social Science Research Network, 2015Co-Authors: Christopher R. Knittel, Ben S. Meiselman, James H. StockAbstract:The U.S. Renewable Fuel Standard (RFS) requires blending increasing quantities of bioFuels into the U.S. surface vehicle Fuel supply. In 2013, the fraction of ethanol in the gasoline pool effectively reached 10%, the ethanol capacity of the dominant U.S. gasoline blend (the “E10 blend wall”). During 2013-2015, the price of RINs—tradeable electronic certificates for complying with the RFS—fluctuated through a wide range, largely because of changes in actual and expected policy combined with learning about the implications of the E10 blend wall. RINs are sold by bioFuels producers and purchased by obligated parties (refiners and importers), who must retire RINs in proportion to the petroleum they sell for surface transportation. As a result, RINs in effect serve as a charge on obligated Fuels and a corrective subsidy for lower-carbon Renewable Fuels, and are neutral for Fuels outside the RFS. In theory, RIN prices provide incentives to consumers to use Fuels with a high Renewable content and to bioFuels producers to produce those Fuels, and as such are a key mechanism of the RFS.This paper examines the extent to which RIN prices are passed through to the price of obligated Fuels, and provides econometric results that complement the graphical analysis in Burkholder (2015). We analyze daily data on RINs and Fuel prices from January 1, 2013 through March 10, 2015. When we examine wholesale prices on comparable obligated and non-obligated Fuels, for example the spread between diesel and jet Fuel in the U.S. Gulf, we find that that roughly one-half to three-fourths of a change in RIN prices is passed through to obligated Fuels in the same day as the RIN price movement, and this fraction rises over the subsequent few business days. Using six different wholesale spreads between obligated and non-obligated Fuels, we estimate a pooled long-run pass-through coefficient of 1.01 with a Standard error of 0.12. We also examine the transmission of RIN prices to retail Fuel prices. The net RIN obligation on E10 is essentially zero over this period, and indeed we find no statistical evidence linking changes in RIN prices to changes in E10 prices. We also examine the price of E85 which, with an estimated average of 74% ethanol, generates more RINs than it obligates and thus in principle receives a large RIN subsidy. In contrast to the foregoing results, which are consistent with theory, the pass-through of RIN prices to the E85-E10 spread is precisely estimated to be zero if one adjusts for seasonality (as we argue should be done), or if not, is at most 30%. Over this period, on average high RIN prices did not translate into discounted prices for E85.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
Timothy A. Slating - One of the best experts on this subject based on the ideXlab platform.
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the Renewable Fuel Standard 3 0 moving forward with the federal bioFuel mandate
Social Science Research Network, 2014Co-Authors: Timothy A. Slating, Jay P. KesanAbstract:Increased reliance on Renewable energy technologies remains the best approach to mitigate the environmental and social problems associated with the unsustainable use of finite fossil Fuels for our energy needs. The Renewable Fuel Standard (“RFS” or “Standard”) exists as a pioneering pillar in the realm of federal incentives for Renewable energy technologies, particularly bioFuels. By mandating the commercialization of socially beneficial bioFuels, it: (1) improves the environment by reducing climate change inducing greenhouse gas emissions from the transportation sector; (2) increases U.S. energy security by reducing petroleum imports from hostile foreign regions; and (3) serves as a driver for much needed economic development. Moreover, it does this through an exceptionally elegant regulatory regime, which imposes its costs on the petroleum industry and, as such, has very little impact on the federal budget. But a political storm is beginning to brew over the continued implementation and existence of the RFS. Petroleum-related interests, who vehemently oppose the RFS for obvious reasons, continue to outspend the lobbying efforts of stakeholders who support it and the food industry, which continues to cling to the increasingly empirically refuted notion that bioFuels have an enormous impact on food prices, are using the 2012 draught as a rallying cry for waiving the RFS’s requirements. Congress is beginning to head the call and has considered an increasing number of Bills seeking to either modify or repeal the Standard.In this Article, we provide a thorough analysis of all issues facing the continued implementation and existence of the RFS. We first set out background information on bioFuels in general and then provide a detailed overview of the enactment, creation, and implementation of the RFS’s regulatory regime. Second, we present a political economy analysis of altering the RFS, where we detail the preferences, critiques, and relative political bargaining power of all affected stakeholders. Next, we detail and comment on all legislative attempts to modify or repeal the RFS that Congress has considered in its current term. Finally, we provide our justified recommendations, which include legislative and administrative reform proposals for moving forward with the Standard. Specifically, we recommend that the bioFuel categories under the RFS be expanded to include socially beneficial biomass sourcing at volumetric target levels consistent with current production and blending realities.
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the effects of the Renewable Fuel Standard rfs on the production of Fuel ethanol in the u s
Social Science Research Network, 2013Co-Authors: Jay P. Kesan, Timothy A. Slating, Hsiaoshan YangAbstract:The Renewable Fuel Standard (RFS) program, which mandates the commercialization of bio-Fuels through 2022, is the U.S.’s most significant Renewable energy policy. It was first established in 2005 in order to create a viable market for bio-Fuels based on the policy goals of enhancing U.S. energy security, reducing transportation-related GHG emissions, and stimulating rural economic development. In this Paper, we provide the first empirical study addressing whether the RFS is an effective policy instrument to incentivize the efficient development of an economically sustainable bio-Fuels industry. Our analysis focuses on data associated with the first-generation bio-ethanol industry and suggests that the RFS contributes to increasing production-related economies of scale. More specifically, our empirical findings suggest that the RFS has a positive significant effect on: (1) the survival rate of first-generation bio-ethanol plants; and (2) the production capacity of first-generation bio-ethanol plants.
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mandatory demand as a policy instrument the case of the Renewable Fuel Standard rfs bioFuel program
Social Science Research Network, 2012Co-Authors: Jay P. Kesan, Timothy A. Slating, Hsiaoshan YangAbstract:The U.S. Congress established the Renewable Fuel Standard (RFS) program, which mandates a certain volume of bioFuel consumption from 2006-2022, in an effort to enhance U.S. energy security, reduce transportation-related GHG emissions, and stimulate rural economic development. In this Paper, we assess the RFS from the viewpoint of industrial policy and provide the first empirical study addressing whether the RFS is an effective policy instrument to incentivize the development of the nascent bioFuels industry. Our analysis focuses on data associated with the first-generation bioethanol industry and suggests that the RFS contributes to increasing economies of scale and improving the competition level among existing firms. More specifically, our empirical analysis suggests that: (1) the RFS has a positive significant effect on the capacity of first-generation bioethanol plants; and (2) the RFS positively affects the survival rate of first-generation bioethanol plants.
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A legal analysis of the effects of the Renewable Fuel Standard (RFS2) and Clean Air Act on the commercialization of biobutanol as a transportation Fuel in the United States
Gcb Bioenergy, 2012Co-Authors: Timothy A. Slating, Jay P. KesanAbstract:Biobutanol is currently a hot topic within discussions about second-generation bioFuels. Its advocates point to the fact that it possesses a higher energy content than traditional bioethanol and, most importantly, that it is compatible with existing Fuel distribution infrastructure. While traditional biobutanol production processes have long since suffered from an inability to produce it in an economically viable manner, several recent technological advances have spurred interest from the private sector and several companies are now actively pursuing the commercialization of biobutanol as a transportation Fuel. As such, a legal analysis of the regulatory frameworks affecting this commercialization is highly relevant. In this study, we detail and analyze the two most import regulatory frameworks affecting the successful commercialization of biobutanol as a transportation Fuel in the United States. First, we provide a thorough description of the US Renewable Fuel Standard (RFS2) and analyze its impact on biobutanol commercialization efforts. Next, we address the US Clean Air Act’s so-called ‘substantially similar’ prohibition and detail the three distinct regulatory paths it creates for biobutanol commercialization. Finally, we conclude by exploring ways in which these regulatory frameworks could be altered to mitigate unjustified regulatory burdens. While our study focuses on the commercialization of biobutanol, its regulatory descriptions and analysis are equally informative in regards to the commercialization of other alcohol-based bioFuels.
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a legal analysis of the effects of the Renewable Fuel Standard rfs2 and clean air act on the commercialization of biobutanol as a transportation Fuel in the united states
Social Science Research Network, 2011Co-Authors: Timothy A. Slating, Jay P. KesanAbstract:Biobutanol is currently a hot topic within discussions about second-generation bioFuels. Its advocates point to the fact that it possesses a higher energy content than traditional bioethanol and, most importantly, that it is compatible with existing Fuel distribution infrastructure. While traditional biobutanol production processes have long since suffered from an inability to produce it in an economically viable manner, several recent technological advances have spurred interest from the private sector and several companies are now actively pursuing the commercialization of biobutanol as a transportation Fuel. As such, an analysis of the legal and regulatory frameworks affecting this commercialization is highly relevant. In this study, we detail and analyze the two most import regulatory frameworks affecting the successful commercialization of biobutanol as a transportation Fuel in the US. First, we provide a thorough description of the U.S. Renewable Fuel Standard (“RFS2”) and analyze its impact on biobutanol commercialization efforts. Next, we address the U.S. Clean Air Act’s so-called “substantially similar” prohibition and detail the three distinct regulatory paths it creates for biobutanol commercialization. Finally, we conclude by exploring ways in which these regulatory frameworks could be altered in order to mitigate unjustified regulatory burdens. While our study focuses on the commercialization of biobutanol, its regulatory descriptions and analysis are equally informative in regards to the commercialization of other alcohol-based bioFuels.
Hsiaoshan Yang - One of the best experts on this subject based on the ideXlab platform.
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an empirical study of the impact of the Renewable Fuel Standard rfs on the production of Fuel ethanol in the u s
Utah law review, 2017Co-Authors: Jay P. Kesan, Hsiaoshan Yang, Isabel Freitas PeresAbstract:The Renewable Fuel Standard (RFS) program, which mandates the commercialization of bioFuels through 2022, is the United States’ most significant piece of legislation regarding Renewable energy. It was first passed in 2005 and revised and expanded in 2007 in order to create a viable market for bioFuels based on the policy goals of enhancing domestic U.S. energy security, reducing transportation-related greenhouse gas (GHG) emissions, and stimulating rural economic development. The RFS requires minimum levels of consumption for different kinds of bioFuels and requires increasing blending amounts of bioFuels into gasoline and diesel Fuels by producers and importers each year. Mandates and targets for bioFuels as required by the RFS are not a policy exclusive just to the U.S. Sixty-four other countries mandate fixed quantities of ethanol use in gasoline to generally stimulate Renewable energy use and to specifically promote production of bioFuels. In the past few years, there have been challenges in complying with the RFS in the U.S. As a result, legislative mandates were modified and reduced to respond to these difficulties. Proponents of the RFS argue that the policy reduces the risk of investing in Renewable Fuel projects, enhances the country’s energy security as well as the rural sector, and addresses climate change concerns. On the other hand, critics argue that policy makers are “picking a winner” by funding bioFuels over other types of alternative energy sources, and mandates for bioFuels have presented unintended consequences in other areas, such as the food markets, land use patterns and the current gasoline-market infrastructure. Many studies have observed beneficial impacts of mandates on the agricultural markets and on the environment. However, there are very few empirical studies of the actual impact of the RFS on the development of the bioFuel industry and none that use an industrial policy approach to analyze this issue. In this Article, we intend to fill this gap and provide an empirical study addressing whether the RFS is an effective policy instrument that incentivizes an efficient and sustainable development of the bioFuels industry. Our analysis uses data from the first-generation ethanol industry between the years 2000 and 2013, and we find that the industry life cycle mediates the effects of the RFS in contributing to production-related economies of scale. More specifically, our empirical findings suggest that the RFS had a significant positive effect on the production capacity of firstgeneration ethanol firms during the early stages of development of the first-generation ethanol industry. But the RFS does not have a statistically significant effect on plant or firm capacity after the first-generation ethanol market entered a mature stage in its product life cycle.
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the effects of the Renewable Fuel Standard rfs on the production of Fuel ethanol in the u s
Social Science Research Network, 2013Co-Authors: Jay P. Kesan, Timothy A. Slating, Hsiaoshan YangAbstract:The Renewable Fuel Standard (RFS) program, which mandates the commercialization of bio-Fuels through 2022, is the U.S.’s most significant Renewable energy policy. It was first established in 2005 in order to create a viable market for bio-Fuels based on the policy goals of enhancing U.S. energy security, reducing transportation-related GHG emissions, and stimulating rural economic development. In this Paper, we provide the first empirical study addressing whether the RFS is an effective policy instrument to incentivize the efficient development of an economically sustainable bio-Fuels industry. Our analysis focuses on data associated with the first-generation bio-ethanol industry and suggests that the RFS contributes to increasing production-related economies of scale. More specifically, our empirical findings suggest that the RFS has a positive significant effect on: (1) the survival rate of first-generation bio-ethanol plants; and (2) the production capacity of first-generation bio-ethanol plants.
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mandatory demand as a policy instrument the case of the Renewable Fuel Standard rfs bioFuel program
Social Science Research Network, 2012Co-Authors: Jay P. Kesan, Timothy A. Slating, Hsiaoshan YangAbstract:The U.S. Congress established the Renewable Fuel Standard (RFS) program, which mandates a certain volume of bioFuel consumption from 2006-2022, in an effort to enhance U.S. energy security, reduce transportation-related GHG emissions, and stimulate rural economic development. In this Paper, we assess the RFS from the viewpoint of industrial policy and provide the first empirical study addressing whether the RFS is an effective policy instrument to incentivize the development of the nascent bioFuels industry. Our analysis focuses on data associated with the first-generation bioethanol industry and suggests that the RFS contributes to increasing economies of scale and improving the competition level among existing firms. More specifically, our empirical analysis suggests that: (1) the RFS has a positive significant effect on the capacity of first-generation bioethanol plants; and (2) the RFS positively affects the survival rate of first-generation bioethanol plants.
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an economic evaluation of the Renewable Fuel Standard rfs bioFuel program an industrial policy approach
Social Science Research Network, 2009Co-Authors: Jay P. Kesan, Atsushi Ohyama, Hsiaoshan YangAbstract:The American public realizes the growing scarcity of petroleum and the desirability of the development of alternative Fuels. In 2005 and 2007, the U.S. Congress passed laws that aim to promote the consumption of Renewable bioFuels. The Environmental Protection Agency then designed the Renewable Fuel Standard Program (RFS) that mandates a certain volume of Renewable bioFuel consumption over the period of 2006-2022. The current policy discussions and analyses regarding the RFS have focused heavily on environmental issues, but we know very little about the U.S. ethanol industry itself. In this study, we examine the potential impact of the RFS on the development process of the U.S. ethanol industry from the viewpoint of industrial policy using ethanol plant-level data. Our analysis suggests that the RFS program contributes to increasing economies of scale and improving competition level among existing firms. The successful development of the U.S. ethanol industry hinges on this factor. The ethanol market is expanding through new plant construction, and the increased competition will let ethanol emerge as a viable Fuel alternative to conventional fossil Fuel.
Lutz Kilian - One of the best experts on this subject based on the ideXlab platform.
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did the Renewable Fuel Standard shift market expectations of the price of ethanol
Social Science Research Network, 2017Co-Authors: Christiane Baumeister, Reinhard Ellwanger, Lutz KilianAbstract:It is commonly believed that the response of the price of corn ethanol (and hence of the price of corn) to shifts in bioFuel policies operates in part through market expectations and shifts in storage demand, yet to date it has proved difficult to measure these expectations and to empirically evaluate this view.
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did the Renewable Fuel Standard shift market expectations of the price of ethanol
Research Papers in Economics, 2017Co-Authors: Christiane Baumeister, Reinhard Ellwanger, Lutz KilianAbstract:It is commonly believed that the response of the price of corn ethanol (and hence of the price of corn) to shifts in bioFuel policies operates in part through market expectations and shifts in storage demand, yet to date it has proved difficult to measure these expectations and to empirically evaluate this view. We utilize a recently proposed methodology to estimate the market's expectations of the prices of ethanol, unfinished motor gasoline and crude oil at horizons from three months to one year. We quantify the extent to which price changes were anticipated by the market, the extent to which they were unanticipated, and how the risk premium in these markets has evolved. We show that the Renewable Fuel Standard (RFS) is likely to have increased ethanol price expectations by as much $1.45 in the year before and in the year after the implementation of the RFS had started. Our analysis of the term structure of expectations provides support for the view that a shift in ethanol storage demand starting in 2005 caused an increase in the price of ethanol. There is no conclusive evidence that the tightening of the RFS in 2008 shifted market expectations, but our analysis suggests that policy uncertainty about how to deal with the blend wall raised the risk premium in the ethanol futures market in mid-2013 by as much as 50 cents at longer horizons. Finally, we present evidence against a tight link from ethanol price expectations to corn price expectations and hence to storage demand for corn in 2005-06.
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did the Renewable Fuel Standard shift market expectations of the price of ethanol
National Bureau of Economic Research, 2017Co-Authors: Christiane Baumeister, Reinhard Ellwanger, Lutz KilianAbstract:It is commonly believed that the response of the price of corn ethanol (and hence of the price of corn) to shifts in bioFuel policies operates in part through market expectations and shifts in storage demand, yet to date it has proved difficult to measure these expectations and to empirically evaluate this view. We quantify the extent to which price changes were anticipated by the market, the extent to which they were unanticipated, and how the risk premium in these markets has evolved. We show that the Renewable Fuel Standard (RFS) increased ethanol price expectations by as much $1.50 initially, raising ethanol storage demand starting and causing an increase in the price of ethanol. There is no conclusive evidence that the tightening of the RFS in 2008 shifted market expectations, but our analysis suggests that policy uncertainty about how to deal with the blend wall raised the risk premium in the ethanol futures market in mid-2013 by as much as 50 cents at longer horizons. Finally, we present evidence against a tight link from ethanol price expectations to corn price expectations and hence to the storage demand for corn in 2005-06.