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| 1 |
ID:
121267
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| Publication |
2013.
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| Summary/Abstract |
Biofuel policies affect global agricultural and oil commodity markets, whose response has consequences for greenhouse gas (GHG) emissions. Estimates of the net GHG impact of biofuel policies are wide ranging and shrouded in uncertainty. We perform a Monte Carlo experiment using a stylized model of the global liquid fuel market and compare different biofuel policies with respect to global GHG emissions and global oil consumption taking ILUC emissions into consideration. We find that for the currently commercial biofuels, inclusion of ILUC emissions as part of the policy rating of biofuels' GHG intensity: (i) likely leads to lower emissions; (ii) leads to greater reduction in both domestic and global oil consumption; (iii) leads to higher price of fuels in the home region; all compared to when ILUC emissions are excluded from the policy rating; and (iv) does not, however, ensure that emissions absolutely decline, owing to fuel market effects, which, unlike ILUC, are presently excluded from all existing fuel GHG regulations. Sensitivity analysis suggests that ILUC emissions and the price elasticity of oil supply are the greatest contributors to variance in net global GHG emissions under any given policy.
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| 2 |
ID:
101395
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| Publication |
2011.
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| Summary/Abstract |
A common assumption in lifecycle assessment (LCA) based estimates of greenhouse gas (GHG) benefits (or costs) of renewable fuel such as biofuel is that it simply replaces an energy-equivalent amount of fossil fuel and that total fuel consumption remains unchanged. However, the adoption of renewable fuels will affect the price of fuel and therefore affect total fuel consumption which, may increase or decrease depending on the policy regime and market conditions. Using a representative two-region model of the global oil market in which, one region implements a domestic biofuel mandate and the other does not, we show that the net change in global fuel consumption due to the policy, which we term indirect fuel use change (IFUC), can have a significant impact on the net GHG emissions associated with biofuel. If LCA-based regulations are designed to account for indirect emissions such as indirect land use change, then we argue that IFUC emissions cannot be ignored. Our work also shows how different policies can affect the environmental impact from adopting a given clean technology differently.
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