Today the Center on Global Energy Policy released a new study, The Renewable Fuel Standard: A Path Forward (PDF), authored by Dr. James Stock, a former Member of the President’s Council of Economic Advisers and now a Harvard economist and non-resident Fellow at the Center.
In the paper, Stock finds that the Renewable Fuel Standard (RFS) is currently imposing costs while failing to provide support for low-carbon second-generation biofuels that can help achieve the program’s energy security and environmental goals.
Stock considers both regulatory and legislative reforms. Central to these reforms is providing certainty about a future policy path and developing a realistic plan for reducing the costs arising from the E10 blend wall. Stock argues that the RFS should be reformed because, absent a comprehensive market-based solution for lowering GHG emissions, it remains an important policy tool for the United States in its goal to reduce emissions, as well as decrease reliance on foreign oil supplies.
Stock examines three possible policy paths forward for the RFS, and finds that the best option would be for EPA to expand the amount of renewable fuel in the fuel supply, consistent with the intent of the statute. But for this path to be cost effective it needs to be coupled with credible steps to expand the consumption of higher blends of ethanol such as E85. Additional legislative reforms could further reduce the program’s cost while sharpening its focus on second-generation fuels.
You can download the full study here (PDF).
