Economic and Environmental Impacts of Washington State Biofuel Policy Alternatives

A computable general equilibrium model is used to analyze the effectiveness of policy alternativesat achieving biofuel-related goals in Washington State. Policy regimes compared includeblend mandates, generally funded volumetric and CO2e (CO2 equivalent) emissions-basedtax/subsidy regimes, and revenue-neutral funded tax/subsidy regimes that use fossil fuel taxesto fund renewable fuel subsidies. Results suggest that a revenue-neutral CO2e emissions-basedtax/subsidy is arguably the most effective single alternative for pursuing the full set of objectivesemphasized in recent Washington State legislation.