Template-Type: ReDIF-Article 1.0
Author-Name:  Daniel Scheitrum
Title:  Impact of Intensity Standards on Alternative Fuel Adoption: Renewable Natural Gas and California's Low Carbon Fuel Standard
Classification-JEL: F0
Pages:  191-218
Volume:  Volume 41
Issue:  Number 2
Year:  2020
Abstract:  Natural gas is a rapidly growing transportation fuel. While fossil natural gas is only slightly cleaner than conventional fuels, it provides a vector to introduce renewable natural gas (RNG) which can yield substantial emissions reductions. This paper considers RNG supply estimates from four possible sources: dairy manure, municipal solid waste, wastewater treatment plants, and landfill gas along with other major transportation fuels to evaluate the impact of California's Low Carbon Fuel Standard (LCFS) a first of its kind fuel intensity standard. A static, multi-market, partial equilibrium, numerical model of the California fuel markets assesses the economic surplus and climate impact responses to the LCFS policy and compares the efficiency of the LCFS to a hypothetical carbon tax. Results indicate LCFS policy is sufficient to incentivize substantial quantities of RNG production. The LCFS approaches the efficiency of a carbon tax as the LCFS policy becomes more stringent when combined with a price ceiling.
Handle: RePEc:aen:journl:ej41-2-Scheitrum
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=3483
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