| 摘要 | Key Points
The main potential benefits to society from the Renewable Fuel Standard (RFS) stemmed from potential reductions in greenhouse gas emissions due to increased biofuel and decreased fossil fuel use. The policy has failed to deliver these benefits.
The RFS experience produces three lessons relevant to government policymaking in this and other areas. The lessons are: (1) incorporate uncertainty, (2) do not give the regulator too much discretion, and (3) do not mandate things that do not exist.
Research into cellulosic biofuel technology should be funded directly, rather than indirectly through the cellulosic mandate. Past farm bills have contributed some funds to this end, but it would be better to fund such research through an agency that spans all climate-change mitigation technologies and can better assess the payoffs to the marginal research dollar.
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Introduction1
Biofuels account for more than 10 percent of farm crop revenue in the United States, so they are an integral part of the farm economy. In 2016, 40 percent of domestic corn production was used to produce ethanol and a quarter of soybean oil was used for biodiesel. These biofuels are blended with petroleum products—ethanol with gasoline and biodiesel with diesel—and sold as transportation fuels.
The main policy governing biofuels is the Renewable Fuel Standard (RFS), which requires that at least a minimum amount of each category of biofuel be blended into the transportation fuel supply each year. The RFS was established by the Energy Policy Act of 2005 and expanded under the Energy Independence and Security Act (EISA) of 2007. The program sets ambitious standards for biofuel consumption, with the overt goals of reducing greenhouse gas (GHG) emissions and reducing dependence on foreign oil.2 An additional effect of the program is to expand demand for corn, soybeans, and some other crops raised by US farms.
The RFS is at a crossroads. Until 2013, the fuel industry met the RFS mandates without too much difficulty. However, the mandates now require more biofuel than the fuel industry can easily absorb. As a result, compliance costs have increased, which in turn have increased lobbying pressures on the Environmental Protection Agency (EPA), which administers the program. The EPA, and by extension Congress, faces important decisions about the future path of the RFS.
Farm bills have devoted relatively few federal resources to biofuels. The energy title in the 2014 Farm Act contained a projected $125 million per year for biofuels, less than 1 percent of projected non-nutrition spending. Actual spending since 2014 has been even lower as appropriations committees have reduced funding. Energy title funding focuses on the development of non-corn-based biofuels, which have potentially larger GHG reduction benefits than corn ethanol and which constitute all of the RFS-mandated growth in biofuels after 2015.3 As such, the energy title is best seen as an abetment to the RFS.
This paper addresses two questions:
What lessons from the RFS are useful for the policymaking process?
What farm bill initiatives could improve US biofuel policy?
I draw three lessons from the RFS that are relevant to government policymaking in this and other areas:
These lessons relate to details of legislation and its implementation, which sets this paper apart from a typical paper on climate policy. Most economic analysis emphasizes a hypothetical first-best policy and evaluates existing policies relative to that ideal. For example, Stephen Holland et al. estimate that the RFS is more than three times more costly than cap and trade for reducing carbon emissions.4 This is an important point that should be made repeatedly, but reiterating it is not the objective of this paper.
The main potential benefits of the RFS stem from reduction of GHG emissions. Such emissions represent a global externality that can be mitigated by subsidizing low-carbon fuels. Two other public benefits, both of which are likely to be small, are often touted by RFS advocates. The RFS could also improve energy security, which can be framed as a public good, and it could improve competition in the fuel sector by preventing the petroleum industry from excluding ethanol. Here, the focus is on greenhouse emission reductions when discussing the public benefits of the policy.
I argue that directing resources to biofuels through the farm bill would produce only small, if any, public benefits. If Congress continues to fund the energy title, it is imperative that Congress target federal resources toward areas with significant public good components. These include research and development, promoting competition, and mitigating network externalities.5
In the next section, I present a short primer on climate change before describing the history of the RFS and its recent challenges. With that background, I then identify the three lessons before discussing the farm bill energy title.
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Notes |
