Hello. Thanks for inviting me. I'll get going.
In my remarks I focus on two challenges related to your study. Because of the tendency of some people to let perfection be the enemy of good, you might have heard strongly negative statements about biofuels and biofuel regulations, but I caution you to discount such extreme positions because evidence supports a more nuanced view. I explain things like this in my latest book, The Citizen's Guide to Climate Success: Overcoming Myths That Hinder Progress. That's the kind of focus I bring to your committee today.
It's actually a simple challenge that we have and a simple solution. We have to use carbon pricing and regulations to replace the open burning of coal, oil and natural gas. It could be with renewable energy, some nuclear power and even still using fossil fuels with carbon capture and storage.
I focus the first part of my remarks on false negative claims about emissions of liquid biofuels. In my 30 years working on the energy transition, I've encountered some extremely negative views on biofuels. Even if unintended, these views can help people who would keep us on a fossil fuel-burning path. One hears that consuming biofuels won't reduce greenhouse gas emissions because burning biomass releases CO2. It's true that if we permanently transform a forest into a desert to make biofuels, this conversion will lead to an increase in atmospheric CO2 emissions, but if we produce the biomass for biofuels from sustainable forestry or agriculture, there's no net increase in atmospheric CO2. This is not my personal view; it's the view of the independent scientific Intergovernmental Panel on Climate Change.
One also hears that even if biomass can be a zero-emission source of energy, it's the production processes of converting it into biofuels that cause CO2 emissions. People refer to this as a life-cycle analysis, looking at the emissions in the growing, harvesting, transporting and processing of the biomass feedstocks that we use to make biofuels. However, again, the Intergovernmental Panel on Climate Change argues that this static life-cycle analysis approach is wrong. Biofuels can be produced using organic fertilizers, and with farm equipment, transport vehicles and biofuel processing plants that are powered by sustainably produced biofuels. Life-cycle emissions from the production of biofuels will be near zero when we implement policies that require it.
We can get a contribution from biofuels that might be, I don't know, 15% or 20% replacement of the liquid fuels that we're currently using in transportation. It's not the solution, but it can be part of that solution. This modest contribution in fact can be critically important. Biomass feedstocks then would come from forest and agricultural organic waste, sustainably managed forest plantations, converted marginal agricultural lands and some sustainable agricultural production that improves income and employment opportunities in our rural regions as part of the energy transition.
I focus the last part of my remarks—for as long as I can go on—on false negative claims about biofuel regulations. I'm an economist. I know that humanity could achieve net-zero greenhouse gas emissions with just one economically efficient policy: a carbon tax. It's technically and administratively possible to apply this one policy and keep it rising until emissions fall to zero, but a singular reliance on carbon tax is politically difficult. We all know all about that and I talk about it in chapter 6 of my book.
That's why leading jurisdictions like California significantly rely on regulations to reduce greenhouse gas emissions. We economists can be fine with this, because well-designed regulation can perform like a carbon tax.
I'll give you one quick example. To get to zero emissions in 2050, we must phase out the burning of fossil-fuel diesel trucks, but we don't know if trucks in 2050 will mostly use electricity, hydrogen or biodiesel, and we don't want government policy to send us down what ends up being the more expensive path.
However, guess what? If government implements a regulation that requires a rising blend of zero-emission biodiesel in regular diesel such that by 2050 the only diesel available for sale is 100% biodiesel, government has not picked the technology energy winner. The regulation has simply reached a level of stringency that bans fossil fuel-burning trucks, which is the same outcome as a rising carbon tax.
Under both policies, the future relative market shares in 2050 of electric trucks, hydrogen trucks or biodiesel trucks will be determined by their relative cost and the preferences of trucking firms. The regulation is technology neutral.
I'm going to end there with those two main points. One, be careful of blanket statements about biofuels being bad. It all depends on how we decide to produce them.