New analyses commissioned by the Great Plains Institute project that adopting a clean fuel standard would bring about economic and air quality benefits for Michiganders while reducing greenhouse gas emissions from the transportation sector. Michigan is one of several Midwestern states working to pass legislation to implement the technology-neutral, market-based policy, also known as a low-carbon fuel standard, clean transportation standard, or clean fuels policy.
Key takeaways
- By reducing fossil fuel use and increasing the use of clean fuels, a clean fuel standard would not only reduce greenhouse gas emissions but also bring about net positive economic benefits and air quality improvements.
- A clean fuel standard requiring a 35 percent carbon intensity reduction by 2035 could generate up to $12 billion in economic benefits for Michigan.
- The analyses show positive impacts for several sectors, including households, trucking, farmers, electricity producers, and electric vehicle charging providers.
- Every single county in Michigan stands to experience air quality improvements under a clean fuel standard.
With support from the Ecology Center and the Stolte Family Foundation, the Great Plains Institute commissioned Horizon Climate Group to conduct an economic impact analysis to examine what a clean fuel standard would mean for Michigan’s economy.
The Horizon Climate Group analysis used the IMPLAN model for the study. IMPLAN is an input-output model widely used to estimate a policy’s economic impact on the region where it is implemented and produces results on the direct, indirect, and induced effects of the policy.
The economic benefits to various sectors from a 35 percent carbon intensity reduction clean fuel standard between 2023 and 2035 are detailed in the table below.
Economic benefits of a 35 percent Michigan Clean Fuel Standard between 2023 and 2035 by sector
| Average Annual Benefit (2023-2035) |
Total Benefit (over 13 years) |
|
| Gasoline Users (Households) | $40 million | $524 million |
| Diesel Consumers (Trucking) | $23 million | $299 million |
| Electricity Producers and Charging Providers | $511 million | $6.6 billion |
| Ethanol Producers and Farmers | $236 million | $3.1 billion |
| Biodiesel Producers and Farmers | $31 million | $406 million |
| Renewable Diesel Producers | $49 million | $633 million |
| RNG Producers | $54 million | $697 million |
Source: IMPLAN analysis by Dane McFarlane, Horizon Climate Group, November 2023.
In addition to economic benefits, the policy promises vast air quality improvements. An analysis completed by Dr. Paul Meier from the Holloway Group at the University of Wisconsin-Madison’s Center for Sustainability & Global Environment with support from the Great Plains Institute and the McKnight Foundation quantifies those improvements.
Using the CO-Benefits Risk Assessment Health Impacts Screening and Mapping Tool (COBRA) to assess how a clean fuel standard would impact air quality and human health, Dr. Meier found that the policy would reduce nitrous oxide emissions by 10 percent and that PM 2.5 reductions would reduce premature mortality with benefits valued at $275 million per year.
The COBRA model estimates that every county in Michigan will experience economic benefits from avoided healthcare costs, shown in the map below.
Avoided healthcare costs from a Michigan Clean Fuel Standard
Source: Figure authored by Elizabeth Abramson, Horizon Climate Group based on COBRA modeling by Paul Meier, University of Wisconsin, October 2023.
Learn more about the benefits of a clean fuel standard in Michigan
For further details on the analyses, download the Michigan Clean Fuel Standard Economic Benefits and the Clean Fuel Standard Impact on Air Quality on Health, which are available on the Clean Fuel Standard Coalition website (GPI is a coalition member).
In addition to lowering the carbon intensity of transportation fuels, data-supported analyses show that clean fuel standards generate net positive economic and air quality benefits. If Michigan passes a clean fuel standard during the 2024 legislative session, Michiganders will be the first Midwesterners to realize those benefits.
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