The impact of key US biofuel policies: An example of the US RFS and California's LCFS

In this chapter, we highlight two prominent and overlapping renewable fuel policies in the United States: the Renewable Fuel Standard (RFS) at the federal level and the Low Carbon Fuel Standard (LCFS) in California. Although they are implemented at different levels, the policies have important cross-effects that influence consumer prices in both “regions,” the ability of obligated parties to meet policy requirements, and the ability to achieve social goals. We analyze hypothetical policy regimes using a set of partial equilibrium models covering both agricultural and biofuel markets. We find that the policies are mutually reinforcing, in that the implementation of one of these policies makes meeting the other policy easier.