A California program to fight climate change may now add more to the cost of gasoline than the state gas-tax increase that many voters want to repeal.
The Low Carbon Fuel Standard, designed to cut greenhouse gas emissions from fuel, now adds 12 to 14 cents per gallon to the cost of gasoline sold in the state, according to an estimate from the Oil Price Information Service. The fiercely debated gas tax increase, which took effect last year to fund road repairs, added 12 cents to the state’s gasoline taxes, which were already among the country’s highest.
The fuel standard’s exact impact on prices is impossible to know. For oil companies, it is a cost of doing business in California, and each company must decide how much of that cost to pass on to consumers.
But estimates of its impact have climbed this year, due to soaring prices for a tradeable credit at the heart of the program. The credits, which traded at around $76 at this time last year, now cost $173. The program caps their price at $200, a level state analysts didn’t think California would reach for another two years.
. . . Nor is the Low Carbon Fuel Standard the only climate program adding to California’s gasoline prices. The state’s cap-and-trade system, in which companies throughout the economy pay for each ton of greenhouse gases they emit, tacks on an additional 12 to 13 cents, according to OPIS.
View Article