As part of his proposals to reduce Washington CO2 emissions, the Governor included a low-carbon fuel standard (LCFS), designed to reduce transportation emissions. Oregon enacted a similar policy recently and it has been cited as evidence that the new restrictions won’t cost much at the pump.

When assessing the policy, we need not only look at what it is likely to cost, but how effective it is at achieving the goal. It might, indeed, be very low cost, but if it provides very little benefit, the ratio of cost to benefit is still poor.

Using data provided by the state of Oregon, a low-carbon fuel standard is relatively expensive, having a high cost for small amounts of CO2 reduction. It costs about ten times as much to reduce CO2 using an LCFS as is currently being paid in the cap-and-trade system in the Northeast U.S.