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Related: About this forumInside climate politics—Study: Pattern of winners and losers explains U.S. policy on fuel subsidies.
http://news.mit.edu/2015/inside-climate-politics-fuel-subsidies-0911[font face=Serif][font size=5]Inside climate politics[/font]
[font size=4]Study: Pattern of winners and losers explains U.S. policy on fuel subsidies.[/font]
Peter Dizikes | MIT News Office
September 11, 2015
[font size=3]The politics of climate change are often depicted as a simple battle, between environmentalists and particular industries, over government policy. Thats not wrong, but its only a rough sketch of the matter. Now a paper co-authored by MIT economist Christopher Knittel fills in some important details of the picture, revealing an essential mechanism that underlies the politics of the climate battle.
Specifically, as Knittel and his colleagues demonstrate, at least one climate policy enacted by Congress on transportation fuels contains a crucial asymmetry: It imposes modest costs on most people, but yields significant benefits for a smaller group. Thus, most people are politically indifferent to the legislation, even though it hurts them marginally, but a few fight hard to maintain it. The same principle may also apply to other types of climate legislation.
In 2005, Congress introduced the Renewable Fuel Standard (RFS), which mandates a minimum level of ethanol that must be used in gasoline every year, as a way of reducing greenhouse gas emissions. Ethanol can indeed reduce emissions, but as Knittel and other economists have argued, it is not the most efficient way of doing so: He estimates that mandating ethanol use is at least 2.5 times as costly, per ton of greenhouse gas reduction, as a cap-and-trade (CAT) policy, which would price the carbon emitted by all transportation fuels.
But corn-based ethanol production has strong political support in the Midwest, where much of the corn industry is based. In the new paper, Knittel and his colleagues quantify that effect in unique detail. They model what U.S. fuel consumption would likely look like through 2022 under both RFS and CAT scenarios, among others. Compared with a cap-and-trade system, the average American would lose $34 annually due to the RFS policy. But 5 percent of U.S. counties would gain more than $1,250 per capita, and one county gains $6,000 per capita.
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[font size=4]Study: Pattern of winners and losers explains U.S. policy on fuel subsidies.[/font]
Peter Dizikes | MIT News Office
September 11, 2015
[font size=3]The politics of climate change are often depicted as a simple battle, between environmentalists and particular industries, over government policy. Thats not wrong, but its only a rough sketch of the matter. Now a paper co-authored by MIT economist Christopher Knittel fills in some important details of the picture, revealing an essential mechanism that underlies the politics of the climate battle.
Specifically, as Knittel and his colleagues demonstrate, at least one climate policy enacted by Congress on transportation fuels contains a crucial asymmetry: It imposes modest costs on most people, but yields significant benefits for a smaller group. Thus, most people are politically indifferent to the legislation, even though it hurts them marginally, but a few fight hard to maintain it. The same principle may also apply to other types of climate legislation.
In 2005, Congress introduced the Renewable Fuel Standard (RFS), which mandates a minimum level of ethanol that must be used in gasoline every year, as a way of reducing greenhouse gas emissions. Ethanol can indeed reduce emissions, but as Knittel and other economists have argued, it is not the most efficient way of doing so: He estimates that mandating ethanol use is at least 2.5 times as costly, per ton of greenhouse gas reduction, as a cap-and-trade (CAT) policy, which would price the carbon emitted by all transportation fuels.
But corn-based ethanol production has strong political support in the Midwest, where much of the corn industry is based. In the new paper, Knittel and his colleagues quantify that effect in unique detail. They model what U.S. fuel consumption would likely look like through 2022 under both RFS and CAT scenarios, among others. Compared with a cap-and-trade system, the average American would lose $34 annually due to the RFS policy. But 5 percent of U.S. counties would gain more than $1,250 per capita, and one county gains $6,000 per capita.
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Inside climate politics—Study: Pattern of winners and losers explains U.S. policy on fuel subsidies. (Original Post)
OKIsItJustMe
Sep 2015
OP
4139
(1,893 posts)1. The Iowa Caucuses = mega corn ethanol lobbying event