In Illinois, a team of researchers writing in Nature Communications concluded California’s indirect land use change factors in the Low Carbon Fuel Standard, applied nationally, would imply that the cost of reducing a ton of carbon is 20 percent higher than the avoided damages from those emissions.
Lead researcher Madhu Khanna found that “It penalizes all biofuels and increases their carbon emissions per gallon. It imposes a hidden tax on all fuels that is borne by fuel consumers and blenders.”
“We find that it is just not worth reducing these indirect land use emissions using California’s approach. It imposes a cost that is passed on to the consumer in the form of a higher cost for fuel,” Khanna says. “These costs for fuel consumers could range from $15 billion to $131 billion nationally over a decade, depending on the indirect land use change factors applied.”
“The inclusion of this indirect land use change factor leads to a relatively small reduction in emissions and this reduction comes at a very large cost to fuel consumers and fuel blenders,” Khanna says. “The economic cost of reducing these carbon emissions is much higher than the value of the damages caused by those emissions, as measured by the social cost of carbon. What our findings suggest is that it’s not optimal to regulate indirect land use change in the manner that it is currently done in California and of extending that to other parts of the country.”
“A lot of effort has been made and continues to be made to calculate the indirect land use change factor so they can be included in implementing low-carbon fuel policies,” Khanna says. “The presence of indirect land use change due to biofuels has in fact dominated the whole debate about the climate benefits of biofuels. We may be more productive if we focus more on the direct carbon saving with biofuels and incorporating those in trying to encourage the move toward lower carbon biofuels rather than regulating the indirect effects. Estimates of the indirect effects of biofuels have also become much smaller over time and it’s time to re-evaluate the benefits of continuing the policy of regulating indirect emissions,” Khanna says.
Evan DeLucia, a U of I professor of plant biology and a co-author on the study, explains that biofuels differ in the carbon emissions they generate per gallon and their effect on use of land. Cellulosic biofuels, particularly from crop residues, or energy crops, like miscanthus and switchgrass, produced on low-quality marginal land lead to lower indirect land use change than corn ethanol.