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The Design and Economics of Low Carbon Fuel Standards

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  • Lade, Gabriel E.
  • Lawell, C.-Y. Cynthia Lin

Abstract

Low carbon fuel standards (LCFS) are increasingly common policy tools used to decrease emissions and increase the penetration of renewable energy technologies in the transportation sector. In this paper, we discuss important design elements of the policy, and provide a background on prominent policies that are currently enacted or proposed. The economics of an LCFS are presented using a simple conceptual model, and the economic literature on the policy is reviewed. Important opportunities to build on the extant literature are identified, including studying the role of low carbon fuel standards in spurring technical change, and the interaction of the policy with other federal and state transportation policies.

Suggested Citation

  • Lade, Gabriel E. & Lawell, C.-Y. Cynthia Lin, 2015. "The Design and Economics of Low Carbon Fuel Standards," ISU General Staff Papers 201501010800001097, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201501010800001097
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    2. Gabriel E Lade & C -Y Cynthia Lin Lawell & Aaron Smith, 2018. "Policy Shocks and Market-Based Regulations: Evidence from the Renewable Fuel Standard," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(3), pages 707-731.
    3. Scheitrum, Daniel, 2017. "Renewable Natural Gas as a Solution to Climate Goals: Response to California's Low Carbon Fuel Standard," MPRA Paper 77193, University Library of Munich, Germany.
    4. Upham, Paul & Virkamäki, Venla & Kivimaa, Paula & Hildén, Mikael & Wadud, Zia, 2015. "Socio-technical transition governance and public opinion: The case of passenger transport in Finland," Journal of Transport Geography, Elsevier, vol. 46(C), pages 210-219.
    5. Gasia, Jaume & Miró, Laia & Cabeza, Luisa F., 2017. "Review on system and materials requirements for high temperature thermal energy storage. Part 1: General requirements," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 1320-1338.
    6. Ambrose, Hanjiro & Kendall, Alissa, 2019. "Life Cycle Modeling of Technologies and Strategies for a Sustainable Freight System in California," Institute of Transportation Studies, Working Paper Series qt3427b1cn, Institute of Transportation Studies, UC Davis.
    7. Christensen, Adam & Hobbs, Benjamin, 2016. "A model of state and federal biofuel policy: Feasibility assessment of the California Low Carbon Fuel Standard," Applied Energy, Elsevier, vol. 169(C), pages 799-812.
    8. Lade, Gabriel E & Lawell, C-Y Cynthia Lin, 2015. "Mandating green: On the Design of Renewable Fuel Policies and Cost Containment Mechanisms," Institute of Transportation Studies, Working Paper Series qt5zj382t4, Institute of Transportation Studies, UC Davis.
    9. Plevin, Richard J. & Delucchi, Mark A. & O’Hare, Michael, 2017. "Fuel carbon intensity standards may not mitigate climate change," Energy Policy, Elsevier, vol. 105(C), pages 93-97.
    10. Huseynov, Samir & Palma, Marco A., 2018. "Does California’s LCFS Reduce CO2 Emissions?," 2018 Annual Meeting, August 5-7, Washington, D.C. 274200, Agricultural and Applied Economics Association.
    11. Yeh, Sonia & Witcover, Julie, 2014. "Status Review of California's Low Carbon Fuel Standard - January 2014 Issue," Institute of Transportation Studies, Working Paper Series qt9gk6w15t, Institute of Transportation Studies, UC Davis.
    12. Ahmad Karnama & João Abel Peças Lopes & Mauro Augusto da Rosa, 2018. "Impacts of Low-Carbon Fuel Standards in Transportation on the Electricity Market," Energies, MDPI, vol. 11(8), pages 1-20, July.

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    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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