Policy shift needed to reduce transportation emissions — study

Source: Amanda Peterka, E&E reporter • Posted: Tuesday, April 8, 2014

The country should shift from “command and control” mechanisms like the renewable fuel standard to a cap-and-trade system to reduce greenhouse gas emissions from the transportation sector, New York University’s policy think tank said yesterday.
In a report, the Institute for Policy Integrity said that a cap-and-trade system would represent the lowest-possible cost for emissions reductions and guarantee continued reductions. U.S. EPA could put such a system in place for the transportation sector without Congress’ help, the NYU analysis found.”EPA must look to new regulatory tools to drive further cuts in transportation emissions,” NYU legal experts Jack Lienke and Jason Schwartz wrote in the analysis.The paper comes as the future of the country’s renewable fuels policy remains front and center in Washington, D.C. EPA is considering lowering federal renewable fuel mandates for the first time this year, while members of both the House and Senate have also introduced legislation to either repeal or modify the renewable fuel standard.The Senate Agriculture, Nutrition and Forestry Committee is planning to hold a hearing today on advanced biofuels to highlight their positive attributes (E&E Daily, April 7).

Through the renewable fuel standard, EPA each year sets targets for conventional ethanol and advanced biofuels that refiners must blend into petroleum gasoline and diesel. Congress put the standard in place in 2007 as a means of reducing emissions from the transportation sector. Corn ethanol was mostly grandfathered in, but makers of new biofuels must meet emissions reductions targets in order for those fuels to qualify for credit.

The new paper warns that EPA is poised to undermine those emissions goals if it reduces the standard this year. The agency is considering a 2014 renewable fuel target that’s about 1 billion gallons lower than the 2013 standard on concerns that the nation is reaching the limit to the amount of ethanol that can be blended into gasoline and delays in scaling up advanced biofuels.

“A static or shrinking biofuels mandate will not achieve the renewable fuel program’s ‘central policy goal’ of reducing carbon pollution,” the NYU researchers wrote.

A recent study by biofuel industry trade group Biotechnology Industry Organization found that EPA’s proposal for 2014 could increase greenhouse gas emissions by the equivalent of putting 5.9 million cars on the road (Greenwire, March 26).

The U.S. transportation sector accounted for nearly 30 percent of total greenhouse gas emissions in the United States in 2012. Emissions have fallen to 9 percent below 2005 levels, but the Institute for Policy Integrity says that command-and-control policies do not guarantee emissions reductions in the future.

The institute argued that EPA should put in place a cap-and-trade system for the transportation sector. Such a program would require upstream fuel sources to possess allowances to cover the potential emissions of any fuel they sell.

A renewable fuel standard is not necessarily even the best means of reducing emissions in the first place, the paper also argued.

“There is no reason to believe that biofuels are always the most cost-effective abatement option for the transportation sector,” Lienke and Schwartz wrote. “Under certain circumstances, increasing bus ridership may prove a cheaper means of reducing emissions.”

EPA could put the program in place without legislation because of its existing authorities within the Clean Air Act that compel the agency to control or prohibit fuels that cause or contribute to air pollution and hurt public health, the NYU paper said.

The researchers qualified, though, that a cap-and-trade program would need to co-exist with the RFS until at least 2022, the last year for which EPA is required to set biofuels targets.