11 States move to develop a low-carbon fuel standard

As a little New Year's Eve present to the world, 11 Northeast and Mid-Atlantic states banded together to start the process of developing a low-carbon fuel standard as part of their efforts to reduce the global warming pollution from their transportation sector. (Here are a few press releases and related stories.) This builds off of Massachusetts announcement earlier last year to launch this sort of effort.  As the framework, signed by the head of each state's environmental agency, explains:

A "low carbon fuel standard" (LCFS) is a market-based, technologically neutral policy to address the carbon content of fuels by requiring reductions in the average lifecycle GHG emissions per unit of useful energy, which the State of California plans to implement for motor vehicles.

Four interesting things to note: first, the framework repeatedly makes reference to including both the direct and indirect emissions associated with biofuels. For instance there's this line:

The undersigned states believe it is critical to understand the true contribution of renewable fuels to reducing GHG emissions, and to calculate the carbon content of fuels on a full lifecycle basis, including direct emissions and significant indirect emissions, such as those from potential land use changes that may be attributable to fuel production.

Second, Pennsylvania signed on. PA is not one of states that adopted the Regional Greenhouse Gas Initiative (RGGI), One could argue that it's easy to sign up for a framework and other thing to implement the rules that are developed pursuant to that framework. I prefer to be optimistic and hope that PA is going to finally starting to get serious about addressing global warming.

Third, it appears that the states get the idea that a LCFS is a necessary but not sufficient step to address the GHG emissions from the transportation sector. They explicitly mention controlling emissions from vehicles (and many of these states have already adopted CA's vehicle CO2 standards--the so called Pavley rules for the former CA legislator Fran Pavley that championed them) and reducing the vehicle miles traveled. There's also this line:

The states intend to be proactive in addressing biofuel sustainability issues within a LCFS, in order to prevent unintended consequences, maintain or increase carbon storage of lands and forests, and maintain and/or improve environmental quality.

I certainly hope that the states will build on this idea of proactive policies to develop a set of companion policies to go with their LCFS. These policies should jump start the best biofuels and require broad sustainability from biofuels and make electrification a real and near-term alternative to biofuels. The technology neutrality of a LCFS is only meaningful if there's more than one technology.

Fourth and finally, it's interesting to note that the letter states that an LCFS is "potentially applicable not only in transportation, but also for fuel used for heating buildings, for industrial processes, and for electricity generation." It will be interesting to see where this leads. Hopefully it's doesn't just turn into an incentive for fuel switching from oil to natural gas. While switching is good, it's not the shift away from fossil fuels that I think is a big part of the impetus behind the LCFS.

The states are relying on NESCAUM to do their analysis and help coordinate their efforts. This is good because, as I've written about before, NESCAUM has been working on this for a while. So they have more than a running start.

In closing the states note that they want to influence any federal debate and have a memorandum of understanding by the end of 2009. All I can add is right on! Let's hope that our New Year's Eve present in 2009 is the LCFS itself.