Competition in U.S. Petroleum Refining and Marketing: Part I - Industry Trends

Moss, Diana L.

doi:10.2139/ssrn.1103581

Cited by 2 publications

(5 citation statements)

References 3 publications

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“…Our theoretical results are even stronger along several dimensions. 9 First, we demonstrate that rate regulation cannot be efficient.…”

mentioning

confidence: 86%

“…Her analysis does not, however, include our other theoretical results. 9 An LCFS can be thought of as regulating the carbon efficiency of fuel. Khazzoom (1980) first identified the "rebound" or "take-back" effect of energy efficiency regulations, and Portney (2003) discusses the rebound effect in CAFE standards.…”

Section: Efficient Fuel Production and Carbon Emissionsmentioning

confidence: 99%

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Greenhouse Gas Reductions Under Low Carbon Fuel Standards?

2007

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A low carbon fuel standard (LCFS) seeks to reduce greenhouse gas emissions by capping an industry's carbon emissions per unit of output. California has launched an LCFS for automotive fuels; others have called for a national LCFS. We show that this policy causes production of high-carbon fuels to decrease but production of low-carbon fuels to increase. The net effect of this may be an increase in carbon emissions. The LCFS may also reduce welfare, and the best LCFS may be no LCFS. We simulate the outcomes of a national LCFS, focusing on gasoline and ethanol as the high-and low-carbon fuels. For a broad range of parameters, we find that the LCFS is unlikely to increase CO 2 emissions. However, the surplus losses from the LCFS are quite large ($80 to $760 billion annually for a national LCFS reducing carbon intensities by 10 percent), and the average carbon cost ($307 to $2,272 per ton of CO 2 for the same LCFS) can be much larger than damage estimates. We propose an efficient policy that achieves the same emissions reduction at a much lower surplus cost ($16 to $290 billion) and much lower average carbon cost ($60 to $868 per ton of CO 2 ).

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“…Our theoretical results are even stronger along several dimensions. 9 First, we demonstrate that rate regulation cannot be efficient.…”

mentioning

confidence: 86%

Section: Efficient Fuel Production and Carbon Emissionsmentioning

confidence: 99%

Greenhouse Gas Reductions Under Low Carbon Fuel Standards?

2007

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“…29 Available at: http://www.ftc.gov/reports/ethanol05/20051202ethanolmarket.pdf. 30 See, Moss (2007). 31 If βx > σ, the traded commodity would be "high carbon energy" and would have a negative price.…”

Section: Tradingmentioning

confidence: 99%

“…For the 10% reduction in carbon intensity, we find that the social surplus loss per ton of CO 2 -the average cost of CO 2 reduction-ranges from $307 to $2,272 per ton. 9 This implies that if the damage per ton of CO 2 is less than $307, the LCFS reduces welfare. Since most damage estimates are less than this, our calculations imply that society would be better off without an LCFS compared to a standard that reduces the carbon intensity by 10%.…”

Section: Introductionmentioning

confidence: 99%

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Greenhouse Gas Reductions under Low Carbon Fuel Standards?

Holland

Hughes

Knittel

2009

American Economic Journal: Economic Policy

192

141

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Low carbon fuel standards (LCFSs) are rapidly becoming an integral part of the national debate over how to reduce greenhouse gas emissions. On January 18, 2007, California Governor Arnold Schwarzenegger signed an executive order launching a low carbon fuel standard to reduce the carbon intensity of fuels for light-duty vehicles.1 The standard, which limits an industry's weighted average carbon emissions rate or, equivalently, the carbon emissions per unit of output, allows fuel producers to achieve a given carbon emissions rate by flexibly altering their production of fuels.2 Senators John McCain and Barack Obama have both called for 1 The executive order S-01-07 states the LCFS shall "reduce the carbon intensity" of fuels. An accompanying white paper states that providers must "ensure that the mix of fuel … meets, on average, a declining standard for GHG emissions."2 There is much ambiguity in the design of an LCFS, including what output is covered (e.g., light-duty versus heavy-duty vehicle fuel), how output is measured (e.g., energy versus miles), and how emissions rates are measured (e.g., upstream versus downstream). These policy design issues are currently being debated for the California LCFS. ($60-$868). (JEL Q54, Q58)

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Competition in U.S. Petroleum Refining and Marketing: Part I - Industry Trends

Cited by 2 publications

References 3 publications

Greenhouse Gas Reductions Under Low Carbon Fuel Standards?

Greenhouse Gas Reductions Under Low Carbon Fuel Standards?

Greenhouse Gas Reductions under Low Carbon Fuel Standards?

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