Obligated parties have chosen to comply with the Renewable Fuel Standard (RFS) by increasing the blending of biomass-based biodiesel beyond originally targeted levels rather than increasing blending/consumption of ethanol to targeted levels that would have required pricing higher blends of ethanol (E85) at or below an energy-equivalent level to E10. This paper develops a welfare-economic framework to analyze the extent to which the nested design and the accompanying cellulosic waiver credit and biodiesel tax credit contributed to a compliance strategy by blenders that favored blending of biodiesel instead of inducing consumption of E85, and its implications for social welfare.
|Original language||English (US)|
|Journal||Journal of the Agricultural and Applied Economics Association|
|State||E-pub ahead of print - Aug 23 2022|
- cellulosic waiver credit
- Renewable Fuel Standard
- nested structure
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Model Code and Data for "Assessing the Efficiency Implications of Renewable Fuel Policy Design in the United States"
Zhong, J. (Creator) & Khanna, M. (Creator), University of Illinois at Urbana-Champaign, Sep 16 2022