Abstract
This paper evaluates the indirect energy-use emission implications of increases in the use of biofuels in the USA between 2001 and 2010 as mandates within a dynamic global computable general equilibrium model. The study incorporates explicit markets for biofuels, petroleum and other fossil fuels, and accounts for interactions among all sectors of an 18-region global economy. It considers bilateral trade, as well as the dynamics of capital allocation and investment. Simulation results show that the biofuel mandates in the USA generate an overall reduction in global energy use and emissions over the simulation period from 2001 to 2030. Consequently, the indirect energy-use emission change or emission leakage under the mandate is negative. That is, global emission reductions are larger than the direct emission savings from replacing petroleum with biofuels under the USA RFS2 over the last decade. Under our principal scenario this enhanced the direct emission reduction from biofuels by about 66%. The global change in lifecycle energy-use emissions for this scenario was estimated to be about 93 million tons of CO2e in 2010, 45 million tons of CO2e in 2020, and an increase of 5 million tons of CO2e in 2030, relative to the baseline scenario. Sensitivity results of six alternative scenarios provided additional insights into the pattern of the regional and global effects of biofuel mandates on energy-use emissions.
