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Global Transportation Decarbonization
Replacing fossil fuels in the name of decarbonization is necessary but will be particularly difficult due to their as-yet unrivaled bundle of attributes: abundance, ubiquity, energy density, transportability and cost. There is a growing commitment to electrification as the dominant decarbonization pathway. While deep electrification is promising for road transportation in wealthy countries, it will face steep obstacles. In other sectors and in the developing world, it’s not even in pole position. Global transportation decarbonization will require decoupling emissions from economic growth, and decoupling emissions from growth will require not only new technologies, but cooperation in governance. The menu of policy options is replete with grim tradeoffs, particularly as the primacy of energy security and reliability (over emissions abatement) has once again been demonstrated in Europe and elsewhere.
Mandates, like the renewable fuel standard (RFS), for biofuels from corn and cellulosic feedstocks, impact the environment in multiple ways by affecting land use, nitrogen (N)-leakage, and greenhouse gas (GHG) emissions. We analyze the differing trade-offs these different types of biofuels offer among these multi-dimensional environmental effects and convert them to a monetized value of environmental damages (or benefits) that can be compared with the economic costs of extending these mandates over the 2016–2030 period. The discounted values of cumulative net benefits (or costs) are then compared to those with a counterfactual level of biofuels that would have been produced in the absence of the RFS over this period. We find that maintaining the corn ethanol mandate at 56 billion l till 2030 will lead to a discounted cumulative value of an economic cost of 109 billion of economic costs and 69 billion which will be partly offset by the net discounted monetized value of environmental benefits of 49 billion over the 2016–2030 period. We explore the sensitivity of these net (economic and environmental) costs to alternative values of the social costs of carbon and nitrogen and other technological and market parameters. We find that, unlike corn ethanol, cellulosic biofuels can result in positive net benefits if the monetary benefits of GHG mitigation are valued high and those of N-damages are not very high.
We conduct a systematic and interdisciplinary review of empirical literature assessing evidence on induced innovation in energy and related technologies. We explore links between demand-drivers (both market-wide and targeted); indicators of innovation (principally, patents); and outcomes (cost reduction, efficiency, and multi-sector/macro consequences). We build on existing reviews in different fields and assess over 200 papers containing original data analysis.
Papers linking drivers to patents, and indicators of cumulative capacity to cost reductions (experience curves), dominate the literature. The former does not directly link patents to outcomes; the latter does not directly test for the causal impact of on cost reductions). Diverse other literatures provide additional evidence concerning the links between deployment, innovation activities, and outcomes.
We derive three main conclusions. (1) Demand-pull forces enhance patenting; econometric studies find positive impacts in industry, electricity and transport sectors in all but a few specific cases. This applies to all drivers - general energy prices, carbon prices, and targeted interventions that build markets. (2) Technology costs decline with cumulative investment for almost every technology studied across all time periods, when controlled for other factors. Numerous lines of evidence point to dominant causality from at-scale deployment (prior to self-sustaining diffusion) to cost reduction in this relationship. (3) Overall Innovation is cumulative, multi-faceted, and self-reinforcing in its direction (path-dependent). We conclude with brief observations on implications for modeling and policy.
In interpreting these results, we suggest distinguishing the economics of active deployment, from more passive diffusion processes, and draw the following implications. There is a role for policy diversity and experimentation, with evaluation of potential gains from innovation in the broadest sense. Consequently, endogenising innovation in large-scale models is important for deriving policy-relevant conclusions. Finally, seeking to relate quantitative economic evaluation to the qualitative socio-technical transitions literatures could be a fruitful area for future research.
This paper critically reviews and identifies gaps in the methodologies used to analyze the environmental impacts of mineral and metal global supply chains. Of specific focus are assessments of the extraction and production of minerals and metals needed for a low-carbon energy future. Current trends and projections suggest that the future low-carbon energy system will have greater material needs than the current one. Thus, it is important to better understand the full impacts of increased resource extraction to help ensure a sustainable and just transition. This review reveals that existing methodologies are currently insufficient in capturing the full suite of environmental, social, and governance concerns. The copper supply chain is used as a case study to highlight areas that require refined or augmented methodologies, with an in-depth examination of the corporate practices of Freeport-McMoRan, Vale, and BHP. Together, this review of existing methodologies and examples from the copper supply chain highlight the incomplete and variable nature of environmental and climate reporting within the mining industry. Areas for future work are defined with the goal of advancing accounting frameworks for the mining industry and the associated supply chain.
div class="section abstract"> As part of the U.S. Environmental Protection Agency’s (EPA’s) continuing assessment of advanced light-duty automotive technologies in support of regulatory and compliance programs, a 2018 Toyota Camry A25A-FKS 4-cylinder, 2.5-liter, naturally aspirated, Atkinson Cycle engine with cooled exhaust gas recirculation (cEGR) was benchmarked. The engine was tested on an engine dynamometer with and without its 8-speed automatic transmission, and with the engine wiring harness tethered to a complete vehicle parked outside of the test cell. Engine and transmission torque, fuel flow, key engine temperatures and pressures, onboard diagnostics (OBD) data, and Controller Area Network (CAN) bus data were recorded. This paper documents the test results under idle, low, medium, and high load engine operation. Motoring torque, wide open throttle (WOT) torque and fuel consumption are measured during transient operation using both EPA Tier 2 and Tier 3 test fuels. The design and performance of this 2018 2.5-liter engine is described and compared to Toyota’s published data and to EPA’s previous projections of the efficiency of an Atkinson Cycle engine with cEGR. The Brake Thermal Efficiency (BTE) map for the Toyota A25A-FKS engine shows a peak efficiency near 40 percent, which is the highest value of any publicly available map for a non-hybrid production gasoline internal combustion (IC) engine designed to run on 91 RON fuel. Further improvement is possible by application of fixed discrete or full continuous cylinder deactivation, both of which are currently in production on other engines.
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Most prior studies have found that substituting biofuels for gasoline will reduce greenhouse gases because biofuels sequester
carbon through the growth of the feedstock. These analyses have failed to count the carbon emissions that occur as farmers
worldwide respond to higher prices and convert forest and grassland to new cropland to replace the grain (or cropland) diverted
to biofuels. By using a worldwide agricultural model to estimate emissions from land-use change, we found that corn-based
ethanol, instead of producing a 20% savings, nearly doubles greenhouse emissions over 30 years and increases greenhouse gases
for 167 years. Biofuels from switchgrass, if grown on U.S. corn lands, increase emissions by 50%. This result raises concerns
about large biofuel mandates and highlights the value of using waste products.
We develop a methodology for testing Hicks's induced innovation hypothesis by estimating a product-characteristics model of energy-using consumer durables, augmenting the hypothesis to allow for the influence of government regulations. For the products we explored, the evidence suggests that (i) the rate of overall innovation was independent of energy prices and regulations; (ii) the direction of innovation was responsive to energy price changes for some products but not for others; (iii) energy price changes induced changes in the subset of technically feasible models that were offered for sale; (iv) this responsiveness increased substantially during the period after energy-efficiency product labeling was required; and (v) nonetheless, a sizable portion of efficiency improvements were autonomous.
To properly evaluate the prospects for commercially competitive battery electric vehicles (BEV) one must have accurate information on current and predicted cost of battery packs. The literature reveals that costs are coming down, but with large uncertainties on past, current and future costs of the dominating Li-ion technology. This paper presents an original systematic review, analysing over 80 different estimates reported 2007-2014 to systematically trace the costs of Li-ion battery packs for BEV manufacturers. We show that industry-wide cost estimates declined by approximately 14% annually between 2007 and 2014, from above US410 per kWh, and that the cost of battery packs used by market-leading BEV manufacturers are even lower, at US$300 per kWh, and has declined by 8% annually. Learning rate, the cost reduction following a cumulative doubling of production, is found to be between 6 and 9%, in line with earlier studies on vehicle battery technology. We reveal that the costs of Li-ion battery packs continue to decline and that the costs among market leaders are much lower than previously reported. This has significant implications for the assumptions used when modelling future energy and transport systems and permits an optimistic outlook for BEVs contributing to low-carbon transport.
The literature is reviewed on the relationships between population, poverty, and climate change. While developed countries are largely responsible for global warming, the brunt of the fallout will be borne by the developing world, in lower agricultural output, poorer health, and more frequent natural disasters. Carbon emissions in the developed world have leveled off, but are projected to rise rapidly in the developing world due to their economic growth and population growth—the latter most notably in the poorest countries.
Lowering fertility has many benefits for the poorest countries. Studies indicate that, in high fertility settings, fertility decline facilitates economic growth and poverty reduction. It also reduces the pressure on livelihoods, and frees up resources to cope with climate change. And it helps avert some of the projected global warming, which will benefit these countries far more than those that lie at higher latitudes and/or have more resources to cope with climate change.
Natural experiments indicate that family planning programs are effective in helping reduce fertility, and that they are highly pro-poor in their impact. While the rest of the world wrestles with the complexities of reducing emissions, the poorest countries will gain much from simple programs to lower fertility.
The literature on the impacts of biofuels on agricultural commodity prices is characterized by contradictory findings. We review studies published between 2007 and 2014 that estimate the effects of U.S. corn ethanol policy on corn prices and find estimates ranging from nil to over 80%. Such divergent results make it difficult to assess the merits of alternative biofuel policies. To bring more clarity to the issue and facilitate comparisons across studies, we assemble a database of over 150 medium-to-long run estimates of the effect of corn ethanol production on corn prices from 29 published studies. We first normalize corn price impacts by the change in corn ethanol volume to control for the large differences in ethanol quantities across scenarios. We then conduct a meta-analysis to identify the factors that drive the remaining variation in corn price impacts across studies. In addition to ethanol volumes, we find that modeling framework, projection year, inclusion of ethanol co-products, and biofuel production from other feedstocks explain much of the differences in price effects. The results indicate that a one billion gallon expansion of the US corn ethanol mandate in the year 2015 would lead to a three to four percent increase in corn prices, with smaller price changes projected in future years.
We present a new framework to identify supply elasticities of storable commodities where past shocks are used as exogenous price shifters. In the agricultural context, past yield shocks change inventory levels and futures prices of agricultural commodities. We use our estimated elasticities to evaluate the impact of the 2009 Renewable Fuel Standard on commodity prices, quantities, and food consumers’ surplus for the four basic staples: corn, rice, soybeans, and wheat. Prices increase 20 percent if one-third of commodities used to produce ethanol are recycled as feedstock, with a positively skewed 95 percent confidence interval that ranges from 14 to 35 percent.
This paper estimates the impact of electrification on employment growth by analyzing South Africa's mass roll-out of electricity to rural households. Using several new data sources and two different identification strategies (an instrumental variables strategy and a fixed effects approach), I find that electrification significantly raises female employment within five years. This new infrastructure appears to increase hours of work for men and women, while reducing female wages and increasing male earnings. Several pieces of evidence suggest that household electrification raises employment by releasing women from home production and enabling microenterprises. Migration behavior may also be affected. (JEL H54, L94, L98, O15, O18, R23)
This paper estimates the technological progress that has occurred since 1980 in the automobile industry and the trade-offs faced when choosing between fuel economy, weight, and engine power characteristics. The results suggest that if weight, horsepower, and torque were held at their 1980 levels, fuel economy could have increased by nearly 60 percent from 1980 to 2006. Once technological progress is considered, meeting the CAFE standards adopted in 2007 will require halting the trend in weight and engine power characteristics, but little more. In contrast, the standards recently announced by the new administration, while attainable, require nontrivial "downsizing." (JEL: L50, L60)
Recent analysis has highlighted agricultural land conversion as a significant debit in the greenhouse gas accounting of ethanol
as an alternative fuel. A controversial element of this debate is the role of crop yield growth as a means of avoiding cropland
conversion in the face of biofuels growth. We find that standard assumptions of yield response are unduly restrictive. Furthermore,
we identify both the acreage response and bilateral trade specifications as critical considerations for predicting global
land use change. Sensitivity analysis reveals that each of these contributes importantly to parametric uncertainty.
A global biofuels program will lead to intense pressures on land supply and can increase greenhouse gas emissions from land-use
changes. Using linked economic and terrestrial biogeochemistry models, we examined direct and indirect effects of possible
land-use changes from an expanded global cellulosic bioenergy program on greenhouse gas emissions over the 21st century. Our
model predicts that indirect land use will be responsible for substantially more carbon loss (up to twice as much) than direct
land use; however, because of predicted increases in fertilizer use, nitrous oxide emissions will be more important than carbon
losses themselves in terms of warming potential. A global greenhouse gas emissions policy that protects forests and encourages
best practices for nitrogen fertilizer use can dramatically reduce emissions associated with biofuels production.
Drugs offer a simple, cost-effective solution to many health problems, provided they are available, affordable, and properly used. However, effective treatment is lacking in poor countries for many diseases, including African trypanosomiasis, Shigella dysentery, leishmaniasis, tuberculosis, and bacterial meningitis. Treatment may be precluded because no effective drug exists, it is too expensive, or it has been withdrawn from the market. Moreover, research and development in tropical diseases have come to a near standstill. This article focuses on the problems of access to quality drugs for the treatment of diseases that predominantly affect the developing world: (1) poor-quality and counterfeit drugs; (2) lack of availability of essential drugs due to fluctuating production or prohibitive cost; (3) need to develop field-based drug research to determine optimum utilization and remotivate research and development for new drugs for the developing world; and (4) potential consequences of recent World Trade Organization agreements on the availability of old and new drugs. These problems are not independent and unrelated but are a result of the fundamental nature of the pharmaceutical market and the way it is regulated.
Negative environmental consequences of fossil fuels and concerns about petroleum supplies have spurred the search for renewable transportation biofuels. To be a viable alternative, a biofuel should provide a net energy gain, have environmental benefits, be economically competitive, and be producible in large quantities without reducing food supplies. We use these criteria to evaluate, through life-cycle accounting, ethanol from corn grain and biodiesel from soybeans. Ethanol yields 25% more energy than the energy invested in its production, whereas biodiesel yields 93% more. Compared with ethanol, biodiesel releases just 1.0%, 8.3%, and 13% of the agricultural nitrogen, phosphorus, and pesticide pollutants, respectively, per net energy gain. Relative to the fossil fuels they displace, greenhouse gas emissions are reduced 12% by the production and combustion of ethanol and 41% by biodiesel. Biodiesel also releases less air pollutants per net energy gain than ethanol. These advantages of biodiesel over ethanol come from lower agricultural inputs and more efficient conversion of feedstocks to fuel. Neither biofuel can replace much petroleum without impacting food supplies. Even dedicating all U.S. corn and soybean production to biofuels would meet only 12% of gasoline demand and 6% of diesel demand. Until recent increases in petroleum prices, high production costs made biofuels unprofitable without subsidies. Biodiesel provides sufficient environmental advantages to merit subsidy. Transportation biofuels such as synfuel hydrocarbons or cellulosic ethanol, if produced from low-input biomass grown on agriculturally marginal land or from waste biomass, could provide much greater supplies and environmental benefits than food-based biofuels.
• corn
• soybean
• life-cycle accounting
• agriculture
• fossil fuel
Electric vehicles have a unique potential to transform personal transportation. We analyze this transition with a dynamic model capturing falling costs of electric vehicles, decreasing pollution from electricity, and increasing vehicle substitutability. Our calibration to the US market shows a transition from gasoline vehicles is not optimal at current substitutability: a gasoline vehicle production ban would have large deadweight loss. At higher substitutability, a ban can reduce deadweight loss from vehicle mix and adoption timing inefficiencies. A cumulative gasoline vehicle production quota has smaller deadweight loss, and an electric vehicle purchase subsidy is more robust to regulator misperceptions about substitutability. (JEL H23, L51, L62, L94, Q53)
Using integrated assessment models, we calculate the economic value of the extraordinary decline in emissions from US power plants. Annual local and global air pollution damages fell from 133 billion over 2010–2017. Decomposition shows changes in emission rates and generation shares among coal and gas plants account for more of this decline than changes in renewable generation, electricity consumption, and damage valuations. Econometrically estimated marginal damages declined in the East from 8.6 to 6 cents per kWh. Marginal damages increased slightly in the West and Texas. These estimates indicate electric vehicles are now cleaner on average than gasoline vehicles. (JEL H23, L94, Q53, Q58)
Weak contract enforcement may reduce the efficiency of production in developing countries. I study how contract enforcement affects efficiency in procurement auctions for the largest power projects in India. I gather data on bidding and ex post contract renegotiation and find that the renegotiation of contracts in response to cost shocks is widespread, despite that bidders are allowed to index their bids to future costs like the price of coal. To study heterogeneity in bidding strategies, I construct a new measure of firm connectedness, based on whether a firm has been awarded coal concessions by the Government. Connected firms choose to index less of the value of their bids to coal prices and, through this strategy, expose themselves to cost shocks to induce renegotiation. I use a structural model of bidding in a scoring auction to characterize equilibrium bidding when bidders are heterogeneous both in cost and in the payments they expect after renegotiation. The model estimates show that bidders offer power below cost due to the expected value of later renegotiation. The model is used to simulate bidding and efficiency with strict contract enforcement. Contract enforcement is found to be pro‐competitive. With no renegotiation, equilibrium bids would rise to cover cost, but markups relative to total contract value fall sharply. Production costs decline, due to projects being allocated to lower‐cost bidders over those who expect larger payments in renegotiation.
Electric Vehicles (EVs)are known as the future vehicles that have the potential to provide environmental benefits all over the world. The Greenhouse Gas (GHG)emissions of EVs have already been estimated for each phase in the life cycle. However, the dedicated estimations in China are not complete enough to reveal the systematic impacts of real manufacturing technologies, driving cycle and recycling processes. This study has analyzed the GHG emissions of the Cradle-to-Gate (CTG)phase, Well-to-Wheel (WTW)phase and Grave-to-Cradle (GTC)phase for different vehicles in different time to figure out the key drivers and reduction opportunities, which are based on the well-selling A0-A class compact sedan model currently in China. The results indicate that the life cycle GHG emissions of an EV are about 41.0 t CO 2 eq in 2015, 18% lower than those of an Internal Combustion Engine Vehicle (ICEV). This value will decrease to only 34.1 t CO 2 eq in 2020 due to the reduction of GHG emission factor of electricity. Although the WTW phase is the largest contributor of GHG emissions for both vehicles, the proportions of each phase are quite different. The GHG emissions of the WTW phase of an EV are decreasing rapidly, but the CTG phase will not be improved at the same speed, which may become a barrier to fully take the environmental benefits of an EV. There are two major opportunities for reduction in the entire life cycle besides fuel economy development. One is EV recycling that can reduce the GHG emissions of the CTG phase by about a half. The other is the improvement of clean power grid that can further reduce the GHG emissions of the WTW phase.
A growing number of policies and programs aim to increase investment in energy efficiency, because conventional wisdom suggests that people fail to take up these investments even though they have positive private returns and generate environmental benefits. Many explanations for this energy efficiency gap have been put forward, but there has been surprisingly little field testing of whether the conventional wisdom is correct. This article reports on the results of an experimental evaluation of the nation's largest residential energy efficiency program- theWeatherization Assistance Program-conducted on a sample of approximately 30,000 households in Michigan. The findings suggest that the upfront investment costs are about twice the actual energy savings. Furthermore, the model-projected savings are more than three times the actual savings. Although this might be attributed to the "rebound" effect-when demand for energy end uses increases as a result of greater efficiency-the article fails to find evidence of significantly higher indoor temperatures at weatherized homes. Even when accounting for the broader societal benefits derived from emissions reductions, the costs still substantially outweigh the benefits; the average rate of return is approximately -7.8% annually. © The Author(s) 2018. Published by Oxford University Press on behalf of the President and Fellows of Harvard College. All rights reserved.
This paper provides the first empirical analysis of the homeowner-renter gap for electric vehicles. Using newly-available U.S. nationally representative data, the analysis shows that homeowners are three times more likely than renters to own an electric vehicle. The gap is highly statistically significant, and remains even after controlling for income. For example, among households with annual income between 100,000, 1 in 130 homeowners owns an electric vehicle, compared to 1 in 370 renters. Additional controls do little to narrow the gap. The paper argues that this is a version of what economists have called the “landlord-tenant’’ problem, and briefly discusses potential policy implications.
Climate change and fossil fuel depletion are the main reasons leading to hydrogen technology. There are many processes for hydrogen production from both conventional and alternative energy resources such as natural gas, coal, nuclear, biomass, solar and wind. In this work, a comparative overview of the major hydrogen production methods is carried out. The process descriptions along with the technical and economic aspects of 14 different production methods are discussed. An overall comparison is carried out, and the results regarding both the conventional and renewable methods are presented. The thermochemical pyrolysis and gasification are economically viable approaches providing the highest potential to become competitive on a large scale in the near future while conventional methods retain their dominant role in H2 production with costs in the range of 1.34–2.27 $/kg. Biological methods appear to be a promising pathway but further research studies are needed to improve their production rates, while the low conversion efficiencies in combination with the high investment costs are the key restrictions for water-splitting technologies to compete with conventional methods. However, further development of these technologies along with significant innovations concerning H2 storage, transportation and utilization, implies the decrease of the national dependence on fossil fuel imports and green hydrogen will dominate over the traditional energy resources.
http://authors.elsevier.com/a/1TkVy4s9HvmItM
In Sub-Saharan Africa, there are active debates about whether increases in energy access should be driven by investments in electric grid infrastructure or small-scale "home solar" systems (e.g., solar lanterns and solar home systems). We summarize the results of a household electrical appliance survey and describe how households in rural Kenya differ in terms of appliance ownership and aspirations. Our data suggest that home solar is not a substitute for grid power. Furthermore, the environmental advantages of home solar are likely to be relatively small in countries like Kenya, where grid power is primarily derived from non-fossil fuel sources.
We estimate the effects of electricity shortages on Indian manufacturers, instrumenting with supply shifts from hydroelectric power availability. We estimate that India's average reported level of shortages reduces the average plant's revenues and producer surplus by 5 to 10 percent, but average productivity losses are significantly smaller because most inputs can be stored during outages. Shortages distort the plant size distribution, as there are significant economies of scale in generator costs and shortages more severely affect plants without generators. Simulations show that offering interruptible retail electricity contracts could substantially reduce the impacts of shortages.
This paper employs an empirically estimated model to study the equilibrium effects of an increase in the US corporate average fuel economy (CAFE) standards. I identify and model heterogeneity across firms and find that the profit impacts of CAFE fall almost entirely on domestic producers. The welfare analyses consider the simultaneous household decision of vehicle and miles traveled, allowing direct comparison with a gasoline tax. Finally, I consider dynamic impacts in the used car market. I find these comprise nearly half the gross welfare cost of CAFE and fall disproportionately on low-income households. Contrary to previous results, the overall welfare costs are regressive.
Carbon dioxide emissions may create significant social harm because of global warming, yet American urban development tends to be in low density areas with very hot summers. In this paper, we attempt to quantify the carbon dioxide emissions associated with new construction in different locations across the country. We look at emissions from driving, public transit, home heating, and household electricity usage. We find that the lowest emissions areas are generally in California and that the highest emissions areas are in Texas and Oklahoma. There is a strong negative association between emissions and land use regulations. By restricting new development, the cleanest areas of the country would seem to be pushing new development towards places with higher emissions. Cities generally have significantly lower emissions than suburban areas, and the city-suburb gap is particularly large in older areas, like New York.
Recently, an active debate has emerged around greenhouse gas emissions due to indirect land use change (iLUC) of expanding agricultural areas dedicated to biofuel production. In this paper we provide a detailed analysis of the iLUC effect, and further address the issues of deforestation, irrigation water use, and crop price increases due to expanding biofuel acreage. We use GLOBIOM – an economic partial equilibrium model of the global forest, agriculture, and biomass sectors with a bottom-up representation of agricultural and forestry management practices. The results indicate that second generation biofuel production fed by wood from sustainably managed existing forests would lead to a negative iLUC factor, meaning that overall emissions are 27% lower compared to the “No biofuel” scenario by 2030. The iLUC factor of first generation biofuels global expansion is generally positive, requiring some 25 years to be paid back by the GHG savings from the substitution of biofuels for conventional fuels. Second generation biofuels perform better also with respect to the other investigated criteria; on the condition that they are not sourced from dedicated plantations directly competing for agricultural land. If so, then efficient first generation systems are preferable. Since no clear technology champion for all situations exists, we would recommend targeting policy instruments directly at the positive and negative effects of biofuel production rather than at the production itself.
Marginal agricultural land is estimated for biofuel production in Africa, China, Europe, India, South America, and the continental United States, which have major agricultural production capacities. These countries/regions can have 320-702 million hectares of land available if only abandoned and degraded cropland and mixed crop and vegetation land, which are usually of low quality, are accounted. If grassland, savanna, and shrubland with marginal productivity are considered for planting low-input high-diversity (LIHD) mixtures of native perennials as energy crops, the total land availability can increase from 1107-1411 million hectares, depending on if the pasture land is discounted. Planting the second generation of biofuel feedstocks on abandoned and degraded cropland and LIHD perennials on grassland with marginal productivity may fulfill 26-55% of the current world liquid fuel consumption, without affecting the use of land with regular productivity for conventional crops and without affecting the current pasture land. Under the various land use scenarios, Africa may have more than one-third, and Africa and Brazil, together, may have more than half of the total land available for biofuel production. These estimations are based on physical conditions such as soil productivity, land slope, and climate.
A low carbon fuel standard (LCFS) seeks to reduce greenhouse gas emissions by limiting the carbon intensity of fuels. We show this decreases high carbon fuel production but increases low carbon fuel production, possibly increasing net carbon emissions. The LCFS cannot be efficient, and the best LCFS may be nonbinding. We simulate a national LCFS on gasoline and ethanol. For a broad parameter range, emissions decrease, energy prices increase, abatement costs are large (80–760 billion annually), and average abatement costs are large (307–2,272 per CO2 metric ton). A cost effective policy has much lower average abatement costs (60–868). (JEL Q54, Q58)
In general, a reduction in trade barriers will affect the environment by expanding the scale of economic activity, by altering the composition of economic activity and by initiating a change in the techniques of production. We present empirical evidence to assess the relative magnitudes of these three effects as they apply to further trade liberalization in Mexico. We first use comparable measures of three air pollutants in a cross-section of urban areas located in 42 countries to study the relationship between air quality and economic growth. We find for two pollutants (sulphur dioxide and `smoke') that concentrations increase with per capita GDP at low levels of national income, but decrease with GDP growth at higher levels of income. We then study the determinants of the industry pattern of US imports from Mexico and of value added by Mexico's maquiladora sector. We investigate whether the size of pollution abatement costs in US industry influences the pattern of international trade and investment. Finally, we use the results from a computable general equilibrium model to study the likely compositional effect of a North American Free Trade Agreement (NAFTA) on pollution in Mexico.
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