The Low Carbon Fuel Standard is making the rounds again in news reports about national and global energy policies. And why not? What’s not to like about low carbon fuels? With such an innocuous name, this looming legislation is bound to resurface every time people talk about policies for reducing emissions.
But you know what they say about things that seem to be true.
As we’ve said before, low carbon fuel standards just don’t make a lot of sense. There’s no evidence that such a law would actually reduce emissions, and many reasons to conclude it would actually result in the U.S. increasing its dependence on Mideast Oil.
But since we’re all likely to be hearing more about the Low Carbon Fuel Standard in the months ahead, it’s worth broadening the argument beyond what those of us here at CEA have to say about it and showing what the science says.
Earlier this year the American Economics Journal published a paper which concluded that a low carbon standard does not decrease overall emissions. Rather, it simply changes the mix of fuels consumed in a manner that might actually have the completely unintended consequence of increasing overall consumption and emissions.
That’s essentially because this fuel standard does not seek to limit actual emissions. Rather it would try to limit production and consumption of certain carbon-intensive fuels, while inadvertently promoting the carbon-light ones. It sounds confusing and it is. Attempting to judge different types of oil or natural gas on the basis of their carbon content – with no regard for shipping costs and multiple other factors – is in the end a dangerous guessing game.
The authors of the study, Greenhouse Gas Emissions Reductions under Low Carbon Fuel Standard? argue that energy consumers told to low-carbon fuels are likely to respond the same way as a child who eats a lot of chocolate and is told to eat more bananas. Rather than replacing the chocolate with a banana, the child would most likely eat the chocolate and the banana, increasing his overall calories.
It’s a useful analogy to remember when trying to make sense of the Low Carbon Fuel Standard … one that gives new meaning to the idea of a kid in a candy store.