During the late 1970s and early 1980s, the high-profile environmental crusade in the vehicle and fuel industries was to establish a ban on lead additives in gasoline–encapsulated by the catchphrase, “get the lead out.” After initial uncertainty and some opposition based on the fear that prices would rise and vehicle performance would suffer, the transition to unleaded fuels proved remarkably easy and effective. The average blood-lead level in the U.S. population dropped by 75 percent in direct response to the reduction in atmospheric lead.
Prior to the lead phaseout, Congress had enacted the Corporate Average Fuel Economy, a sustained effort to raise average vehicle efficiency standards in response to the 1973 Arab oil embargo. That effort increased vehicle mileage standards by more than 25 percent. Those were the good old days in transportation, when achievable, yet ambitious, targets were codified, enforced, and adjusted as technological, economic, and environmental needs changed. Better still, these targets set a precedent for what’s possible.
Once again, technological innovation and economic and environmental necessity is altering the landscape of vehicle efficiency. Today’s innovation is reminiscent of the effort to “get the lead out,” only this time the goal is to “get the carbon out” of transportation fuels. And the policy that will connect forward-thinking researchers with ambitious emission-reduction targets is a low-carbon fuel standard.
The low-carbon fuel standard is a simple and elegant concept that targets the amount of greenhouse gases produced per unit of energy delivered to the vehicle, or carbon intensity. In January 2007, California Gov. Arnold Schwarzenegger signed Executive Order S-1-07, which called for a 10-percent reduction in the carbon intensity of his state’s transportation fuels by 2020. Eight months later, a coalition that included researchers at the University of California, Berkeley, responded with a technical analysis of low-carbon fuels that could be used to meet that mandate. The report relies upon life-cycle analysis of different fuel types, taking into consideration the ecological footprint of all activities included in the production, transport, storage, and use of the fuel.
Under a low-carbon fuel standard, fuel providers would track the “global warming intensity” (GWI) of their products and express it as a standardized unit of measure–the grams of carbon dioxide equivalent per megajoule of fuel delivered to the vehicle (gCO2e/MJ). This value measures vehicle emissions as well as other trade-offs, such as land-use changes, that may result from biofuel production. For example, an analysis of ethanol shows that not all biofuels are created equal: Ethanol derived from corn but distilled in a coal-powered refinery is worse on average than gasoline, but some cellulosic-based biofuels have the potential for a dramatically lower GWI.
According to the report, regular gasoline has a value of 85-92 gCO2e/MJ; natural gas has a value of about 80 gCO2e/MJ; electricity used to power an electric vehicle in California has a value of 27 gCO2e/MJ; and cellulosic ethanol derived from municipal solid waste has a value of 5 gCO2e/MJ. (TheERG Biofuel Analysis Meta-Model, developed to ascertain these values, is available online.)
Equipped with detailed measurements that relate directly to the objectives of a low-carbon fuel standard, policy makers can set standards for the mix of fuels to be sold in a state or nation, and then regulate the value down over time. This arrangement permits some percentage of more traditional, dirtier fuels to remain part of the regional economy for a period of time–a flexibility that smoothes the transition to, and enforcement of, the new standard.
As the world’s first low-carbon fuel provision, implementation of California’s plan is likely to become a road map for others. (See “The Carbon Footprint of Transportation Fuels.”) Presidential candidates Barack Obama and John McCain have already endorsed this design, although federal legislation hasn’t been passed yet.
In January 2007, independent Vermont Sen. Bernard Sanders and Democratic California Sen. Barbara Boxer introduced Global Warming Pollution Reduction Act S 309, which incorporates a low-carbon fuel standard. The following March, Republican senators Susan Collins and Olympia Snowe–both from Maine–along with California Democratic Sen. Dianne Feinstein, introduced Clean Fuels and Vehicles Act of 2007 S 1073 to enact a national low-carbon fuel standard. In May, senators Boxer and Collins, with independent Connecticut Sen. Joe Lieberman, introduced Advanced Clean Fuels Act of 2007 S 1279, which also incorporates a low-carbon fuel standard. Meanwhile Obama and Democratic senators Richard Durbin of Illinois and Thomas Harkin of Iowa introduced National Low Carbon Fuel Standard Act of 2007 S 1324. On the House of Representatives side, Democratic Cong. Jay Inslee of Washington introduced HR 2215 “to provide a reduction in the aggregate greenhouse gas emissions per unit of energy consumed by vehicles and aircraft, and for other purposes.”
Outside of the United States, the European Commission proposed a European low-carbon fuel standard around the same time that Schwarzenegger signed Executive Order S-1-07. British Columbia has also pledged to adopt California’s low-carbon fuel standard. Germany and Britain are developing their own standards.
The appeal of a low-carbon fuel standard is that it establishes performance levels and opens the transportation fuels market to new competitors, not allowing the government to lock in on pet programs or technologies. Liquid fuel providers who produce and sell diesel fuel, gasoline, or biofuels–as well as electricity providers who “fuel” plug-in hybrid vehicles with electricity generated by renewables–can all now compete for the transportation dollar. Competition and market forces are tremendously useful to encourage innovation that lowers costs.
A fascinating parallel exists in the stationary power industry. More than 29 states have adopted minimum clean energy standards for electricity, also known as renewable energy portfolio standards. Similar to the low-carbon fuel standard, the goal of renewable energy portfolio standards is to decrease the average carbon emissions per kilowatt hour of electricity generated over time by increasing the use of renewable generation technologies.
All of this momentum is headed toward a steady evolution to cleaner fuels, but there’s no reason to stop at eliminating greenhouse gas emissions. There are other ramifications of fuel usage that we can measure and need to improve. For example, key issues that must be integrated into the impacts assessment of biofuel production include excessive water use, nitrogen loading in soils and streams, erosion on formerly fallow land, competition with food production, and the impacts on communities where biorefineries are located. All are important–and increasingly difficult to quantify. In addition, the so-called indirect land use effect, i.e., changes in land use around the world as cropland is taken out of food production in the United States, needs to be considered. This may become a major issue, and one that is particularly hard to measure.
Finally, a lurking issue is how fuel standards will interact with the price of carbon emissions more generally. Regional frameworks such as the Western Climate Initiative, a collaboration by the governors of Arizona, California, New Mexico, Oregon, and Washington, and the Regional Greenhouse Gas Initiative, a cooperative effort of Northeastern and Mid-Atlantic states, are already working toward their own cap-and-trade systems for reducing greenhouse gas emissions, and several other regional markets may yet evolve in the United States. The European Union enacted an emissions trading scheme shortly after the Chicago Climate Exchange, which has spun off a market in Europe and will soon do so in India.
If these carbon pricing projects work out, sector-specific regulations will likely need to evolve, both to address areas where the carbon price is too low to affect change and to focus on ecological and cultural sustainability issues. A natural next step is to evolve from a low-carbon fuel standard to a sustainable fuel standard.
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