Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102054
Authors: 
Greaker, Mads
Hoel, Michael
Rosendahl, Knut Einar
Year of Publication: 
2014
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 09/2014
Abstract: 
Recent literature on biofuels has questioned whether biofuels policies are likely to reduce the negative effects of climate change. Our analysis explicitly takes into account that oil is a non-renewable natural resource. A blending mandate has no effect on total cumulative oil extraction. However, extraction of oil is postponed as a consequence of the renewable fuel standard. Thus, if emissions from biofuels are negligible, the standard will have beneficial climate effects. The standard also reduces total fuel (i.e., oil plus biofuels) consumption initially. Hence, even if emissions from biofuels are non-negligible, a renewable fuel standard may still reduce climate costs. In fact our simulations show that even for biofuels that are almost as emissions-intensive as oil, a renewable fuel standard has beneficial climate effects.
Subjects: 
Renewable fuel standard
Blending mandate
Biofuels
Climate costs
Petroleum extraction profile
JEL: 
Q3
Q4
Q5
Document Type: 
Working Paper

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