This paper attempts to identify whether or not the green paradox is withheld when renewable fuel standards and blending mandate policies implemented by the U.S. and EU, respectively, are employed to promote the use of biofuels in the transport sector. The problem is addressed using a simplified model of the global transport market for energy, provided solely by fossil-based fuels made from oil and biofuels. A climate change model translates emissions from the use of the fossil-based fuels to the accumulation of greenhouse gases in the atmosphere and temperature implications.
The findings suggest that, with the exception of the introduction of a renewable fuel standard policy in a market where oil is supplied competitively, resource extraction rates and emissions are delayed compared to reference scenarios in the absence of biofuel policies and the green paradox does not hold. For all policy scenarios evaluated, the modified resource extraction and emissions paths have negligible impacts on the accumulation of greenhouse gases in the atmosphere. The results imply that the use of biofuels in the transport sector as a substitute for oil will play a trivial role in mitigating future increases in global temperatures and that the employment of renewable fuel standards and blending mandates will not speed up the rate of global warming.