Policy Options for Reducing GHG Emissions from Transportation Fuels

Policy Brief
August 2009

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Transportation is the second largest contributor to total U.S. greenhouse gas (GHG) emissions and responsible for about one-third of U.S. carbon-dioxide emissions from the combustion of fossil fuels. There are a variety of policy strategies that can be used to address GHG emissions from the transportation sector; this paper focuses on two such mechanisms. The first policy is an economy-wide cap-and-trade program, which would include transportation fuels under the cap and, thus, limit GHG emissions from fossil fuel combustion. The second is a low-carbon fuel standard (LCFS), which would set a carbon intensity targets for the entire range of transportation fuels. Either one or both policies can be implemented as a means to reduce GHG emissions from transportation.