e-journal
Economic, Energy Security,And Greenhouse Gas Effects Of Biofuels: Implications For Policy
Existing studies show that biofuels offer the potential for providing energy security and
GHG mitigation, particularly with the development of cellulosic biofuel technologies, even
after market-mediated effects are incorporated. The economic benefits with biofuel policies,
arising due to the improvement in terms of trade for the United States, could, however,be several times larger than these external benefits,particularly if there is significant learning by doing in biofuel production,which improves their competitiveness with oil. Policies differ in the extent to which they provide these benefits and induce cost-reducing technological change. The RFS offers potential assurance of demand for high-cost biofuels and while it can contribute to energy security and economic benefits to U.S. economy, its global GHG mitigation benefits are expected to be small.These can, however, be enhanced by combining it with a LCFS and carbon tax policy that can shift the mix of biofuels toward the less carbon intensive advanced biofuels and achieve these multiple benefits with less adverse impacts on food prices.
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