Regional Credit Trading: Economic and GHG Impacts of a National Low Carbon Fuel Standard

摘要

This research examines the economic implications of different designs for a U.S.national low carbon fuel standard (NLCFS) for the road transportation sector. ANLCFS based on the average carbon intensity (CI) of all fuels sold in the gasolineand diesel markets generates an incentive for fuel suppliers to reduce the measuredCI of their petroleum fuels. Recent work looked at the implications of differentdesigns for a national NLCFS in terms of compliance costs, credit price volatility,energy security and possible saving from different credit trading systems for the onroadtransportation sector. Extending that previous work done from an aggregatenational perspective, this paper takes into account regional supplies of low carbonfuels, differences in the regional CI of petroleum fuels and differences in the prices ofgasoline and diesel. It also examines the impact of California’s regional LCFS oncompliance costs of a NLCFS. We find significantly different costs of compliance byregion. At the same time, flexibility mechanisms in terms of credit trading andbanking can lower costs substantially.