What is in this article?:
- Report says RFS a proven economic success
- Minimal food price effect
- A new study finds that the Renewable Fuel Standard is reducing crude oil prices, decreasing crude oil imports, increasing gross domestic product, and having only minimal impacts on global food markets and land use.
Minimal food price effect
Minimal Food Price Effects: The results also showed the RFS has only negligible impacts on food prices. According to the study, “increases in food commodity prices under the RFS2 policy were less than 1 percent throughout the period from 2002 to 2030.” Prices for livestock, poultry, and dairy products were shown to remain stable, or even decrease in some years, under the RFS2. Prices for coarse grains and oilseeds were shown to increase by less than 1 percent as a result of the RFS2.
Negligible Land Use Impact: The researchers also examined the agricultural land use impacts of the RFS2, finding that the policy actually results in “…a slight [net] reduction in global land use for agriculture.” The modeling showed that any marginal increases in agricultural land use resulting from the RFS2 would be largely constrained to the United States and offset by decreases in land use in other regions. This result stands in stark contrast to previous modeling results suggesting the RFS2 would induce significant land use expansion outside of the United States. The study shows U.S. agricultural land use would be just 0.4 percent higher (less than 2 million hectares) in 2015 than would be the case without the RFS2 in place. However, slightly expanded land use in the U.S. is more than offset by reduced agricultural land use in other regions, particularly the Middle East and Africa, by 2022.
Benefits Shrink with Increased Biofuel Imports: The study examines a case where the long-term RFS advanced biofuel requirements are met with imported sugarcane ethanol rather than domestically produced renewable fuels. Logically, this case results in less economic benefit for American consumers. The authors write, “…a greater reliance on [biofuel] imports could reduce the benefits of advanced biofuels significantly…” because “…imported biofuels displace domestic production and, as with oil, increase payments for fuels to the [rest of the world]…”
The study is available for purchase here.