This paper develops a conceptual framework and a numerical simulation model of the fuel and agricultural sectors in the US to analyze the effects of the existing Renewable Fuels Standard (RFS) that mandates the blending of specific volumes of low carbon biofuels with liquid fossil fuels and a...

This article shows that in the presence of environmental externalities, it may be welfare enhancing to overcome a technological lock-in by a deadend technology through governmental intervention. It is socially desirable to subsidize a dead-end technology if its environmental externality is small...