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Valuing Carbon Recycling through Ethanol: Zero Prices for Environmental Goods

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DOI: 10.4236/tel.2014.43032    3,020 Downloads   3,819 Views   Citations

ABSTRACT

The Energy Independence and Security Act of 2007 imposes a Renewable Fuel Standard met through a combination of corn and cellulosic ethanol. A variety of rationales support this policy including the recycling of atmospheric carbon. This study examines the economic dimensions of this problem focusing on the role of zero prices for environmental goods and the use of an environmental equivalent. When environmental goods are taken into account, the optimal price policy cannot be defined with certainty.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

Moss, C. and Schmitz, A. (2014) Valuing Carbon Recycling through Ethanol: Zero Prices for Environmental Goods. Theoretical Economics Letters, 4, 235-240. doi: 10.4236/tel.2014.43032.

References

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[5] Moss, C.B. and Schmitz, T.G. (2011) The Potential Effect of Ethanol on the U.S. Economy: A General Equilibrium Approach. In: Schmitz, A., Wilson, N., Moss, C. and Zilberman, D., Eds., The Economics of Alternative Energy Sources and Globalization, Bentham eBooks, Oak Park, Illinois, 35-49.
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