First it was the unprovable Indirect Land Use Change (ILUC) theory. Now ethanol is being challenged by a new “what goes around comes around” hypothesis called the “Global Rebound Effect.”
Earlier this week, the Clean Air Task Force filed suit against the Environmental Protection Agency over the Renewable Fuel Standard for failing “to account for the “global rebound effect” when analyzing the lifecycle greenhouse gas emissions from biofuels.”
This theory goes on the assumption that, “By displacing some gasoline from the US market, the RFS reduces overall demand for petroleum, which in turn leads to lower prices, increased consumption, and higher greenhouse gas emissions in other countries. If EPA had considered the “global rebound effect” in its analysis of different biofuels, only a few of those fuels would have met Congress’s emissions reduction requirements.”
Using this theory, ANY action the United States might take to reduce gasoline consumption – from using more ethanol to increasing vehicle fuel efficiency – will result in INCREASED gasoline use elsewhere in the world. As Renewable Fuels Association president Bob Dinneen puts it, “Whatever environmentalist activists call this new theory, I call it nonsense.”
RFA is is challenging the lawsuit and the whole concept of Global Rebound Effect. “To penalize a technology, any technology, that reduces American oil consumption for any potential oil use in other nations is asinine,” said Dinneen. “Environmentalists are in favor of precious little these days, but by applying their new logic even efforts to improve efficiencies such as gas mileage must suffer a carbon penalty. It simply defies logic.”
That is indeed what the theory says, according to Steven Stoft, founder of the Global Economic Policy Center. In something he wrote last year called, “Corn Whiskey vs. the Climate,” Stoft said, “More ethanol use causes less oil to be imported, which causes a lower world “oil” price, which causes more liquid-fuel use worldwide. This same effect applies to conserving oil as well as to replacing it with ethanol, or even to pumping more oil from Alaska.”
RFA is also challenging the lawsuit claims that EPA is using overly optimistic assumptions about the nature of ethanol production in 2022, implicitly implying little improvement will occur in ethanol production technology between now and then. “To assume that no further innovation will occur in America’s ethanol industry is akin to believing the iPad is the final product from Apple,” said Dinneen.
The case, and RFA’s challenge to it, has been filed with the U.S. Court of Appeals for the District of Columbia.