[From Green Car Congress] The National Low Carbon Fuel Standard (LCFS) Project has released two major reports that synthesize its findings from the past several years of work: a Technical Analysis Report (TAR) and Policy Design Recommendations.
The primary objectives of the National Low Carbon Fuel Standard (LCFS) Study were to (1) compare an LCFS with other policy instruments, including the existing Renewable Fuel Standard (RFS2) and a potential carbon tax, that have the potential to significantly reduce transportation greenhouse gas (GHG) emissions from fuel use; and (2) propose a policy structure for an LCFS that would be implementable, cost effective, and provide maximum economic gains to the consumers and the society…
Building on LCFS policies already adopted in Europe, British Columbia, and California, the researchers looked at potential costs and benefits of reducing the carbon intensity of transportation fuels by 10 to 15 percent by 2030. Very broadly, they found that an LCFS would buffer the economy against global oil price spikes, trim demand for petroleum, and lessen upward pressure on gas prices. It would also create fresh opportunities for new fuels to compete in the marketplace, save consumers money, reduce greenhouse gas emissions from the transportation sector, and boost energy security…
The researchers made 13 summary policy recommendations for developing a national LCFS policy:
- Adopt complementary policies to maximize the benefits of an LCFS.
- Modify RFS2 to incorporate elements of an LCFS, or replace it with an LCFS.
- Initially include within the scope of the LCFS all fuels used in on-road vehicles.
- Set a target of reducing the carbon intensity of gasoline and diesel by 10 to 15 percent by 2030.
- Regulate the parties responsible for producing, importing, or supplying fuel.
- Use energy efficiency ratios to adjust the carbon intensity ratings of fuels for diverse propulsion technologies.
- Create separate fuel pools for gasoline and diesel.
- Regulate fuels according to their life-cycle GHG emissions.
- Address GHG emissions from land use change (LUC) through short-term and long-term policies.
- Treat all crude oils as part of the overall pool of transportation fuels.
- Harness market forces using LCFS credits.
- Implement performance-based sustainability standards.
- Harmonize global LCFS policies.
Adopt complementary policies to maximize the benefits of an LCFS. No single policy, including a carbon tax or an LCFS policy, can overcome all the market conditions and failures that inhibit the commercialization of nonpetroleum transportation fuels, the report states. Additional, complementary policies to address key underlying issues that are difficult to address with broad policy solutions such as a carbon tax or an LCFS are needed…