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The social inefficiency of regulating indirect land use change due to biofuels

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  • Madhu Khanna

    (Institute for Sustainability, Energy, and Environment, University of Illinois)

  • Weiwei Wang

    (University of Illinois)

  • Tara W. Hudiburg

    (Rangeland, and Fire Sciences)

  • Evan H. DeLucia

    (Institute for Sustainability, Energy, and Environment, University of Illinois)

Abstract

Efforts to reduce the indirect land use change (ILUC) -related carbon emissions caused by biofuels has led to inclusion of an ILUC factor as a part of the carbon intensity of biofuels in a Low Carbon Fuel Standard. While previous research has provided varying estimates of this ILUC factor, there has been no research examining the economic effects and additional carbon savings from including this factor in implementing a Low Carbon Fuel Standard. Here we show that inclusion of an ILUC factor in a national Low Carbon Fuel Standard led to additional abatement of cumulative emissions over 2007–2027 by 1.3 to 2.6% (0.6–1.1 billion mega-grams carbon-dioxide-equivalent (Mg CO2e−1) compared to those without an ILUC factor, depending on the ILUC factors utilized. The welfare cost to the US of this additional abatement ranged from $61 to $187 Mg CO2e−1 and was substantially greater than the social cost of carbon of $50 Mg CO2e−1.

Suggested Citation

  • Madhu Khanna & Weiwei Wang & Tara W. Hudiburg & Evan H. DeLucia, 2017. "The social inefficiency of regulating indirect land use change due to biofuels," Nature Communications, Nature, vol. 8(1), pages 1-9, August.
  • Handle: RePEc:nat:natcom:v:8:y:2017:i:1:d:10.1038_ncomms15513
    DOI: 10.1038/ncomms15513
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    Cited by:

    1. Madhu Khanna & Xiaoguang Chen & Weiwei Wang & Anthony Oliver, 2022. "Repeal of the Clean Power Plan: Social Cost and Distributional Implications," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(1), pages 33-51, January.
    2. Yang, Lan & Wang, Xue-Chao & Dai, Min & Chen, Bin & Qiao, Yuanbo & Deng, Huijing & Zhang, Dingfan & Zhang, Yizhe & Villas Bôas de Almeida, Cecília Maria & Chiu, Anthony S.F. & Klemeš, Jiří Jaromír & W, 2021. "Shifting from fossil-based economy to bio-based economy: Status quo, challenges, and prospects," Energy, Elsevier, vol. 228(C).

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