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How Do Biofuel Use Mandates Cause Uncertainty? United States Environmental Protection Agency Cellulosic Waiver Options

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  • Seth Meyer
  • Wyatt Thompson

Abstract

Biofuel policy in the United States sets minimum use mandates for different biofuels, but the cellulosic mandate, introduced in 2010 has been waived and reduced to nearly zero since then. This waiver has shifted the burden of compliance to other biofuels, but other options exist. We examine some alternatives using a structural model of biofuel, agricultural, and mandate markets. Our estimates show that crop price levels, crop and livestock farm income, compliance costs, and greenhouse gas emissions are all sensitive to whether and how the cellulosic mandate is waived. Mandate analysis that does not consider Environmental Protection Agency implementation, or waiver analysis that disregards the hierarchical nature of the mandates could be misleading. Copyright 2012, Oxford University Press.

Suggested Citation

  • Seth Meyer & Wyatt Thompson, 2012. "How Do Biofuel Use Mandates Cause Uncertainty? United States Environmental Protection Agency Cellulosic Waiver Options," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(4), pages 570-586.
  • Handle: RePEc:oup:apecpp:v:34:y:2012:i:4:p:570-586
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    Cited by:

    1. Condon, Nicole & Klemick, Heather & Wolverton, Ann, 2015. "Impacts of ethanol policy on corn prices: A review and meta-analysis of recent evidence," Food Policy, Elsevier, vol. 51(C), pages 63-73.
    2. Mason, Charles F. & Wilmot, Neil A., 2016. "Price discontinuities in the market for RINs," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 79-97.
    3. Aguilar, Francisco X. & Cai, Zhen & Mohebalian, Phillip & Thompson, Wyatt, 2015. "Exploring the drivers' side of the “blend wall”: U.S. consumer preferences for ethanol blend fuels," Energy Economics, Elsevier, vol. 49(C), pages 217-226.
    4. repec:gam:jsusta:v:9:y:2017:i:11:p:2056-:d:118140 is not listed on IDEAS
    5. repec:eee:eneeco:v:67:y:2017:i:c:p:300-314 is not listed on IDEAS
    6. Debnath, Deepayan & Whistance, Jarrett & Thompson, Wyatt & Binfield, Julian, 2017. "Complement or substitute: Ethanol’s uncertain relationship with gasoline under alternative petroleum price and policy scenarios," Applied Energy, Elsevier, pages 385-397.
    7. Dumortier, Jerome, 2014. "Impact of different bioenergy crop yield estimates on the cellulosic ethanol feedstock mix," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 171168, Agricultural and Applied Economics Association.

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