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Climate policies for road transport revisited

Road transport is entering a phase of major structural shifts. The age of cheap oil seems to end, while at the same time climate change puts major doubts on the societal benefit of our current mobility. A number of alternative fuels and technologies enter the stage, and most of them promise less GHG emissions and reduced oil dependency. While it is true that electric cars, lighter and more efficient vehicles, and - perhaps - some sort of biofuels can contribute to our global challenges, their success crucially depends on reliable, effective, and efficient policy frameworks. The US and the EU implemented policies regulating road transport and its GHG emissions. However, these policies are adapted to fossil fuels, and not to alternative fuels. There is a considerable risk, that these policies are ineffective to decarbonize alternative fuels. A publication of our group - just published in Energy Policy - addresses this issue.

So what is at stake?

The key observation is that the GHG emissions of alternative fuels are usually not end-of-pipe but occur upstream, and a varying. Ultimately, by looking at the end product - electricity, hydrogen, or biofuels - you cannot know the real carbon footprint. E.g., does the electricity come from coal power plants or solar panels? The life-cycle emissions of biofuels vary depending on agricultural production process, refining, and direct and indirect land use changes, and can possibly exceed those of gasoline.

The current regulation, however, regulates cars in terms of GHG intensity per km (e.g., in the EU and California). Awkward constructions are used to include electric cars in this regulation, usually by some sort of default parameters. But the carbon footprint of electricity varies a lot. And - in some countries - consumers can choose their electricity provider, and hence their carbon footprint.

As a consequence, cars are better regulated in terms of energy efficiency (MJ/km). That allows a level playing field across both car technologies and fuels, and addresses the issue car manufacturer can do something about: the required energy need for cars. Such a measure, if unbiased by property-based metrics - will not only induce technological innovation but additional pressure towards light materials and smaller cars, conversing harmful trends of the last two decades.

A complementary measure can then address all GHG emissions. Our analysis reveals that biofuel mandates are completely inadequate to reduce carbon contents of bio/agrofuels. Indeed, if pushed into markets without differentiation, the cheapest and most harmful biofuels are often preferred.

The Californian Low Carbon Fuel Standards, but also part of the RFS2 and EU legislation are better by requiring GHG emission threshold for alternative fuels, or at least biofuels. However, indirect land use effects are not at all (US, EU - up to now) or inadequately (California) addressed. Furthermore, rebound effects easily compromise the efficiency of these instruments.

Instead, some sort of price instruments, and quantity regulation of GHG emissions from road transport is most effective and efficient. More on this issue in the next blog.

F. Creutzig, E. McGlynn, J. Minx, O. Edenhofer (2011) Climate policies for road transport revisited (I): Evaluation of the current framework. Energy Policy 39(5): 2396-2406

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