Evaluation of California Greenhouse Gas Standards and Federal Energy Independence and Security Act - Part 2: CO2 and GHG Impacts 2008-01-1853

This is the second of two papers that examine the future effectiveness of the California greenhouse gas “GHG” program and the federal fuel economy program established in the Energy Independence and Security Act of 2007 (“EISA 2007”) in controlling greenhouse gases. SAE 2008-01-1852 estimates the fuel economy levels that the California and federal programs can be expected to require, under assumptions stated in that paper. This paper applies those fuel economy estimates to examine the impact of the California and federal programs on lifecycle emissions of GHGs and carbon dioxide (“CO2”).

EISA 2007 not only proposes to improve car and LDT fuel economy, but it also proposes to reduce GHGs through its Renewable Fuel Standards (“RFS”) provisions, which are likely to lead to substantial expansion in the use of 85% ethanol gasoline blends (E85). It is unlikely, however, that E85 use will expand in California and states that have adopted California emission standards because those standards effectively restrict the production of E85 FFVs. This difference between the California and federal programs likely will make the California program less effective in reducing overall greenhouse gas emissions, especially outside of California. California is working to implement a Low Carbon Fuel Standard that may address this issue within California.

This paper evaluates the impacts of the two programs in two states - California and Colorado. The analysis shows that the California standards may, under certain assumptions, result in somewhat lower fleetwide CO2 and GHG emissions in the 2012 to 2018 calendar year time frame. The California program's advantage over the Federal program is much shorter in Colorado than in California, due to the greater fraction of light duty trucks sold in Colorado. Under an alternative scenario that assumes that fuel economy standards are maximum feasible regardless of location, the federal program provides greater CO2 and GHG benefits due to the RFS provisions. Under either set of assumptions, however, after 2018 or thereabouts, the federal program provides greater CO2 and GHG benefits.