Transportation fuels
and GHG emissions reduction
Steven J. Taff
Department of Applied Economics
University of Minnesota

Goal: Reduce GHG from transportation
• Drive less – tax on gas, miles, or GHG (miles)
• Better cars – CAFE (miles/gallon)
• Cleaner cars – GreenCar (GHG/mile)
• Cleaner fuel – RFS, LCFS (GHG/gallon)
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Scoring and Standards
• None can be easily or directly measureed
• All need models and averaging and broad
standards
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Scoring
• What included (field, plant, car, iLUC)
• Where measured (local…world)
• What number (LCA or direct)
• What model (GREET, BESS, MnGREET?)
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population prosperity policy
Indirect
land use
CROP
change?
• PRICE
CROP
DEMAND
Increase Change land
management use
intensity
Environment
CROP
weather
change
SUPPLY
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Scoring
matters
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Policy linkages
• Independent / Summable
• Complementary / Synergistic
• Conflicting / Redundant
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MGA policy linkages model
• This is a “what‐if” model, not a “what‐should‐
we‐do” model
• Emphasis on how policies might change
activities
• Focus on links among policy actions, not on
implication of stand‐alone actions
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How policies influence outcomes
economy
policy DECISIONS outcomes
parameters
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• People/Firms do the best they can with what
they’ve got
• People/Firms choose lowest‐cost activity that is
financially, legally, and technically feasible.
• Government sets the stage so that people/firms,
in doing what’s best for themselves, do what’s
best for Society.
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Policies
Electricity
Energy,
Emissions, and
Transportation
Expenditures—
and Jobs
Building
efficiency
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GHG accounting
Sequestration
Electricity reduction
Transportation
Total GHG
emissions
Buildings
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Life cycle accounting
Direct
(combustion)
Production
facility
Supplies and Total
Hauling
manufacturing
Farm/Wellfield Indirect landuse
change
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Policies
• Convince people to do something good
• Require people to do something good
• Pay people to do something good
• Make people pay to do something bad
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Today: When Policies Collide
• Stricter CAFE standard
• GHG tax
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CAFE Standard
CAFE
fuel use
standard
by car
(MPG)
(MPG)
GHG
from
vehicles
Cost to
Annual
meet CAFE
average fuel
($/Vehicle)
cost per car Fuel use
(BTU)
Other Vehicle
Costs Car
choice
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GHG tax
Energy
intensity
(BTU/ton)
GHG Tax
Carbon
($/ton GHG)
intensity
(GHG/BTU)
Total cost
($/BTU)
Technical
costs
($/BTU)
GHG
Energy
emissions
portfolio
Demand (BTU)
for energy
(BTU)
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• Let’s go to the MGA model
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Steven J. Taff
Department of Applied Economics
University of Minnesota
612.625.3103
sjtaff@umn.edu
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