Abstract
Using the case of the USA Renewable Fuel Standard (RFS), this paper contributes to theorizing regarding the factors that affect feedback dynamics of a disruptive technology. Focusing on design elements of the RFS and governance features related to its implementation, it demonstrates the resulting feedback effects on first-generation conventional biofuels and second-generation advanced biofuels. In terms of policy design, the analyses highlight the significance of the calibration of policy instruments and the incorporation of multiple policy goals into a single policy instrument. In terms of implementation procedures, the analyses affirm the significance to feedback dynamics of the regulatory capacity and discretionary authority of administrative agents as well as the influence of interest group coalitions in rulemaking. In the case of second-generation advanced biofuels, the case study also reveals the limits of policy-induced feedback in the presence of regulatory uncertainty and unfavorable financial conditions.
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Notes
This paper uses the terms renewable fuels and biofuels interchangeably. The acronym RFS is used to refer to the renewable fuel mandate established in 2005 as well as to the policy more broadly.
Although some authors make finer distinctions among feedback processes (see, for example, Levin et al. 2012), this paper uses the simpler distinction of positive or self-reinforcing feedback, negative or self-undermining feedback, and no feedback effects. The rationale is that lock-in and increasing returns feedback effects can be subsumed under positive feedback effects.
It is certainly likely that policy-makers do not always anticipate correctly the implications of a policy. However, attention to policy design offers important insights into how policies are put together, their flexibility and resilience over time, and how they can come unstuck (cf. Capano and Howlett 2019; Howlett 2014; Howlett et al 2015).
As confirmed by a staff member of the Renewable Fuels Association, in conversation with the author in October 2011. The two associations shared office space.
Mondou et al. (2014: footnote 8, 171) note one instance of the petroleum industry, in a 2002 appearance before the Energy Subcommittee of the House Committee on Government Reform and Oversight, to stop ethanol from replacing MTBE as a fuel additive, emphasizing ethanol’s higher costs.
A Congressional staffer as well as a long-time government employee interviewed by the author in October 2011 in Washington, DC, expressed the view that “The oil industry can live with liquid biofuels as long as they are blended in small amounts.”
This term was used by an analyst for the Congressional Research Service, interviewed in Washington, DC, in April 2012.
This language was used by a representative of the National Biodiesel Board interviewed in Washington in April 2012.
This language was used, in a conversation with the author, by an individual who was a senior official in Department of Energy in the Bush Administration. During this same conversation, held in October 2011, the individual described the situation as “a brutal time, with oil at that price.”
This term was used by an EPA official interviewed in Washington, October 11, 2011. In a separate interview, a representative of the National Corn Growers’ Association stated: “Before the 2007 bill passed, ethanol was the darling child of every Congressman. People I never knew came up to me in the halls and said they wanted to write an ethanol bill—to do something, even though they did not know anything about it.” See also Mondou et al (2014).
The remainder of the RFS consisted of 4 billion gallons per year of advanced biofuels and 1 billion gallons per year of biomass-based biodiesel.
The target increased from 7% of the total RFS in 2010 to 58% of the RFS in 2022 (Congressional Research Service 2018, pp. 1–2).
Information obtained from a conversation with a staff member for a Democratic Senator on the Energy and Natural Resources Committee, October 2011, Washington, DC.
This observation is based on information obtained from congressional staff, environmental groups, and administration officials interviewed by the author in Washington, DC, in October 2011. See also Breetz (2017, pp. 28–29).
Life cycle analysis models are a tool used to evaluate the environmental benefits of alternative renewable fuels relative to fossil fuels. They consider GHG emissions from all stages of the renewable fuel from its production through to its use in vehicles, including emissions in the production of the renewable fuel feedstock as well as emissions in the transportation of the renewable fuel to a processing facility, its processing, its distribution to the retail outlet, and in its use in vehicles (Environmental Protection Agency 2007: 219).
Information obtained in an interview with an EPA official, October 11, 2011, Washington, DC.
This information is based on an interview with a senior official in the Department of Energy who stated that “venture capital got to Bush.” This same individual, and another government official, interviewed in October 2011 in Washington, DC, offered the following explanation for why the President and other enthusiasts endorsed high cellulosic mandates: “They believed what they wanted to happen.”
Interested parties have informal access to EPA personnel at the pre-proposal stage, the public notice and comment stage, and the rule finalization stage.
Cook (2018: 469) states: “Once an EPA rule is published in the Federal Register, it has the effect of a law. Stakeholders may file litigation via the petition for reconsideration process and the EPA can make changes to the rule via this process. If the agency declines those petitions, stakeholders are then able to file litigation in the federal court system.” Over 80 percent of major EPA regulations under new environmental statutes are challenged in court (Kochtcheeva 2009, 242) on grounds that the EPA acted in an arbitrary fashion or trespassed beyond its legislative authority. Cook (2018) reports that the courts typically uphold agency rules.
See also Kochtcheeva (2009, 262).
Cook (2018) documents that parties that participate in the earliest, pre-proposal, stage of EPA rulemaking are especially successful in securing rule changes, as are those with expertise.
As an official in the EPA Office of Transportation and Air Quality explained in an interview with the author in April 2012, “It [ILUC] is all based on modeling possible consequences resulting from projected decisions. It is always a counterfactual statement. You cannot measure the land use in the future policy-on versus policy-off. There will always be this type of uncertainty.”
These terms were used by a senior EPA official in a telephone interview with the author March 20, 2012.
This explanation of the changes that occurred between the proposed rule and the final rule was given in an April 2012 interview by an official in the EPA Office of Transportation and Air Quality. The official explained: “EPA has its models, but it works with industry and considers their data.” Gillon (2014, 323) observes that results across different life cycle models calculating biofuels’ carbon and energy balances were highly variable.
The EPA eventually dropped the 2011 and 2012 cellulosic requirements to zero.
They are the Advanced Biofuels Association, Advanced Ethanol Council, American Coalition for Ethanol, Renewable Fuels Association, Biotech Industry Organization, Algal Biomass Organization, and Growth Energy.
It included the American Coalition for Ethanol, BIO, Growth Energy, the National Corn Growers Association, the National Sorghum Producers, and the Renewable Fuels Association.
The major auto manufacturers are part of this coalition by virtue of their concern that engines in post-2001 vehicles could be damaged by fuels that blend ethanol beyond 10 percent (the normal rate).
See the testimony of the petroleum sector and other critics at a Joint Hearing before the Subcommittee on Environment and Subcommittee on Oversight, Committee on Science, Space and Technology. House of Representatives, November 3, 2015.
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Skogstad, G. Mixed feedback dynamics and the USA renewable fuel standard: the roles of policy design and administrative agency. Policy Sci 53, 349–369 (2020). https://doi.org/10.1007/s11077-020-09378-z
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DOI: https://doi.org/10.1007/s11077-020-09378-z