Ex Post Costs and RIN Prices Under the Renewable Fuel Standard

The authors critically review the Environmental Protection Agency’s (EPA) assessment of the costs and benefits of the Renewable Fuel Standard (RFS2) as summarized in its Regulatory Impact Analysis (RIA). The authors focus particularly on the EPA’s methods used to calculate costs of the policy on the US fuel market. The authors compare the EPA’s ex ante cost and benefit estimates to measures of ex post costs implied by the price of compliance credits under the policy. Overall, the authors find that the Agency’s assessment was inadequate. In spite of, or perhaps because of, the detailed and complex analysis underlying the RIA, the EPA overlooked several fundamental factors. The authors conclude by recommending a simplification of the analysis used in RIAs, as well as the use of “stress tests” in RIAs to ensure that programs like the RFS2 are designed in ways that can manage high compliance cost scenarios.

• Record URL:
  https://rosap.ntl.bts.gov/view/dot/66978
• Corporate Authors:

  University of California, Davis

  Department of Agricultural and Resource Economics
  Davis, CA  United States  95616

  Resources for the Future

  ,    
• Authors:
  • Lade, Gabriel E
  • Lin, C-Y Cynthia
  • Smith, Aaron
• Publication Date: 2015-6-19

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References; Tables;
• Pagination: 38p

Subject/Index Terms

• TRT Terms: Alternate fuels; Benefit cost analysis; Estimates; Market assessment; Methodology
• Identifier Terms: Renewable Fuel Standard; U.S. Environmental Protection Agency
• Subject Areas: Economics; Energy; Transportation (General);

Filing Info

• Accession Number: 01879161
• Record Type: Publication
• Files: NTL, TRIS
• Created Date: Apr 13 2023 9:03AM