Some Inconvenient Truths About Climate Change Policy

Instead of efficiently pricing greenhouse gases, policy makers have favored measures that implicitly or explicitly subsidize low carbon fuels. The authors simulate a transportation-sector cap & trade program (CAT) and three policies currently in use: ethanol subsidies, a renewable fuel standard (RFS), and a low carbon fuel standard (LCFS). The simulations confirm that the alternatives to CAT are quite costly|2.5 to 4 times more expensive. http://web.mit.edu/ceepr/www/publications/workingpapers/2011-016.pdf